As you leave our lab and take a narrow walkway down to one of the main streets in Durham, you pass through a small parking lot and a few chain restaurants. Yesterday afternoon, that parking lot was packed tightly with a long line of patrons waiting to buy a $1 sub for Jimmy John’s “Customer Appreciation Day.”

If the crowd was any indication, the promotion was a success (although it’s hard to tell how “appreciated” the customers felt without distributing some surveys—maybe next time…). It was clear, however, that they were willing to wait an incredibly long time to get a cheap sub. And that might very well change where they get lunch in the future.

In standard economics, the way we decide to spend our money reflects how useful or enjoyable we expect a product or service to be. We pay five dollars for a sub because we expect to get five dollars of value from eating it, and so on. But findings in psychology and behavioral economics suggest that the choices we make can do more than simply reveal our preferences—they shape them, too.

One classic study by Leon Festinger and James Carlsmith showed the effect that actions can have on our preferences. Participants in their experiment performed a mind-numbing task and were asked to describe it to another person while pretending to have enjoyed it. But there was one crucial difference between two groups: They were paid either a low or high amount of money to do this. Compared to those who were well compensated, the participants who were paid a small amount of money enjoyed the experiment more and reported a higher likelihood of returning to perform a similar experiment.

Festinger and Carlsmith concluded that their low-paid participants experienced a dissonance between the amount of money they were paid and their own willingness to perform the task. And since they couldn’t take back their efforts, they justified their behavior by increasing their enjoyment of the task. Here, we could say quite a bit about what Festinger and Carlsmith called “cognitive dissonance,” but let’s instead focus on how this affected their participants’ later behavior.

When we look back on our past actions, we tend to ignore situational factors and assume instead that we made that decision for good reasons. This actually changes how we feel about those decisions later, and that can change our future behavior. This process, where we look to our past behaviors to guide our future decisions, is called self-herding. To provide a simple example, imagine that you got a particularly flattering evaluation last Friday at work. You were feeling pretty happy about this and decided to celebrate by inviting some co-workers to a bar for a drink. The next Friday, as you’re considering what to do that evening, you might look back on your past excursion and decide to do it again. You look to the past behavior (going out for drinks) rather than the situational factors (the glowing report) that led you to the behavior.

So the people waiting in a long line for a cheap sub that everyone seems excited about might look back tomorrow and like Jimmy John’s more than they otherwise would have. Though they might look herded to one another, standing in a line that stretches out the door and into the parking lot, it’s how they’re herded to themselves that matters in the long run.

~Vlad Chituc~

Read more:
Chapter 2 in Predictably Irrational and Chapter 10 in the Upside of Irrationality
Dan Ariely and Michael Norton (2007), “How Actions Create—Not Just Reveal—Preferences.” TRENDS in Cognitive Sciences. Vol. 12, No. 1: 13 – 16.

Time and time again, you hear students talk about how lonely graduate school can be. To fight the loneliness, graduate students often befriend each other, play board games together, go to trivia nights together, or yes even party together—only on weekends and always responsibly of course. Even though this makes graduate school less lonely, the research itself may remain a lonely enterprise.

Yet it doesn’t have to be: future professors, inventors, and intellectual powerhouses are residing on the desk across from you, why not take advantage of that?

On day one of graduate school I wished someone would have told me so many things (e.g. difference between theory-application, how run certain models) but most of all I wish someone would simply have told me: “Student peers are fundamentally important to your academic life.”

Of course, everyone knows you want to befriend and get along with the students in your department. However, unlike during your undergraduate studies where friendship is the ultimate goal, in graduate school so much more can occur. Graduate students are not just potential friends, they are potential colleagues, co-authors, discussion partners, support networks, and walking encyclopaedias of various literatures. Fellow students are the one of the biggest and most powerful resources in graduate school, yet we often overlook this fact.

No matter who your advisor is, he or she will not be around as much as your fellow students who are almost always there. They hear your ideas in class and lab, attend your conference presentations, talk at length with you over coffee and lunches, and see your ideas develop from day one. In many ways your peers often know your ideas, thought processes, passions, and weaknesses better than anyone else. This is especially true for students working with multiple advisors or switching between advisors.

Yet, often we simply don’t take advantage of our friendly fellow students. We don’t follow the example of the Psych Your Mind students who spend one lunch a week talking about ideas just amongst themselves. We don’t take the time to kick ideas back and forth, or just be someone’s sounding board. Instead, we stumble into advisor meetings will ill-prepared pitches, when a pre-conversation with a peer could have drastically improved them.

Recently, a group of students at a conference agreed to start a purposefully small and private online message board group, so they could communicate about important topics and questions. With this message board system, these students can get insight on complicated questions, methods, cites, and theories within an hour. A network of graduate students supporting each other can be at times more powerful than any individual meeting with a faculty member.

Lastly, even if we talk together or form networks, we don’t tend to co-author with each other. Remember last time you just couldn’t figure out the right stimuli, couldn’t handle the stress of a revision, and got writers block? Or remember that time you needed feedback from your advisor, but the advisor was in a conference in Spain? That’s when a student co-author would have saved you.

Professor Gavan Fitzsimons at Duke University often gets praised for one interesting talent: he’s good at putting graduate students together and building research teams. He knows how powerful a network of graduate students, senior professors, and often also young professors can be and his CV is a testimony of that.

There’s a belief in Improv Comedy that when two performers get on stage and make up a scene together, the performers create something that is greater than either performer would have created own their own. Improv performers believe that putting two passionate people together creates true greatness as they positively build upon one another’s ideas. Whether it is as co-authors, giving feedback on manuscripts, or just chatting about research over lunch, togetherness is a path to greater things.

~Troy Campbell~

Originally posted on InDecision Blog.

Every year, March Madness gives us an underdog story and millions flock to a momentary allegiance with a college they could not locate on a map. In the past it has been George Mason, Virginia Commonwealth University and Butler, and this year we eagerly await a new momentary hero.

So why do we love underdogs?

Well, no matter whether you are Republican or Democratic, work for Microsoft or Apple, or are a janitor or CEO, you most likely see yourself as somewhat of an underdog.

In America, especially compared to other countries, the underdog narrative is an honorable and respectable narrative. From the American patriots in 1776 to the George Mason Patriots in 2006, the Cinderella story, as it is specifically called in the NCAA tournament, has always been an attractive one.

So with underdogs you have 1) a narrative people like and 2) a narrative people see themselves in. Is it any wonder people want to cheer for underdogs? It’s like cheering for yourself.

These serve to energize us with the hope that people like ourselves can do anything. People like to believe that those above us aren’t that great after all, and that people like us are just as good, if not better than the people in power.

In fact, the narrative is so strong that Neeru Paharia, of the Harvard Business School, and colleagues named a psychological effect after it, simply “the underdog effect.” They found that companies gain goodwill from consumers when companies present themselves as a group that has overcame disadvantages through sheer determination. This effect was stronger for people who personally related with the narrative and stronger in cultures (e.g., America) where the narrative was more prevalent.

This narrative dominates American culture not only in sports but in all other popular media. From Luke Skywalker to Cinderella, Americans crave stories about underdogs. Even the more privileged characters in storylines, such as the elite James Bond or billionaire Tony Stark, end up in situations where they must overcome disadvantages through sheer determination.

Even politicians are forced to conform to the narrative, regardless of reality. This is a challenge that proved difficult for Mitt Romney and may have greatly have hurt his campaign.

The underdog narrative doesn’t only sell fiction, politics and sports, it also sells nonfiction books in my field of social science. The nearly unparalleled success of Malcolm Gladwell’s “Outliers” owes a lot of that success to the intuitive appeal of his “10,000 hours doctrine.” Gladwell concludes that if someone spends 10,000 hours at something they can become an expert, implying to readers (who don’t carefully read Gladwell’s other more nuanced chapters) that they can make it just by trying hard.

Hip Hop artist Macklemore of the “Thrift Shop” fame even opens his chart-topping first album with a song called “Ten Thousand Hours.” He directly references Gladwell’s name in the song, chants “Ten thousand hours, felt like thousands hands, they carry me,” and then raps “Take that system!”

Oddly enough, many political pundits on both sides of the spectrum have argued (mostly for political reasons) that such a dream is fading in America. But psychological research shows that when beliefs we value are threatened, we try to find ways to defend such beliefs and keep the belief alive. Believing that an underdog will win in Atlanta this year might be a good way to keep alive that wonderful American underdog dream.

This article was originally published in the Providence Journal and can be read here.

~Troy Campbell~

Collectable experiences are defined as unique, unusual, novel, or extreme experiences. Instead of viewing the Super Bowl blackout of 2013 as a frustrating experience, view it as a “collectable experience” and you will enjoy it more.

That’s what researchers did one New Years Eve in Times Square with a similarly frustrating event. Spectators were increasingly nervous about the oncoming snow. However, when the researchers reframed the night as “the first New Years Eve snow in recent history,” spectators enjoyed the event much more as they became part of a unique story—a collectable experience.

We all want to be part of stories and to collect experiences to tell stories about. Some of us want this more than others (known as people high in productivity orientation), but all of us are looking to some degree to build our experiential resumes full of unique and fascinating experiences (e.g. staying in Ice-Hotels, going to New Orleans during Mardi Gras, eating at a weird restaurant).

Last night, millions of Americans collected an experience. An experience that other generations did not have and will not have. This blackout was a good thing, especially if we can get ourselves to think of it as a good thing. For happiness is often found simply in how one looks at things.

 ~Troy Campbell~

I have recently gotten hooked on ABC’s Shark Tank (based on the original Dragon’s Den), a reality show in which rookie entrepreneurs seek investments from wealthy self-made investors. These investors are the titular “Sharks,” who receive investment proposals ranging from a folding guitar company to a business in cat toilet-training kits. Once a sales pitch is made, Sharks can offer to invest, and will sometimes compete with one another for the opportunity. At times, the entrepreneurs leave with nothing, and occasionally they are laughed off the stage.

One lure of Shark Tank is the way it puts the psychology of negotiation on display. When entrepreneurs enter the “shark tank,” they put forward an offer, asking a specific amount of money in exchange for a percentage of equity in their company. (Dividing the dollar amount by the percentage stake provides an estimated valuation of the company.) This offer serves as a powerful anchor for both parties, which can exert a dramatic influence on the subsequent negotiations.

In spite of their own appetites for money, when an entrepreneur presents an inflated valuation of their company, Sharks often pass up the investment opportunity. For instance, if an entrepreneur asks for $100,000 in exchange for a 10% stake in her company, but the Sharks estimate the company’s worth at far less than a million dollars, they may back out brashly rather than make a lower offer. Although an inflated valuation may indicate poor business sense on a contestant’s part, it often seems that the Sharks’ decisions to pull out in scenarios like this are based on emotion rather than business savvy.

On the other hand, sometimes a Shark’s initial offer appears to bias an entrepreneur against considering other options. An offer that demands double the equity for the same cash investment may appear unfavorable when, in fact, the initial valuation was off. When a Shark offers to buy a business outright and pay the founder royalties, entrepreneurs tend to reject the proposition, even if it makes financial sense. The entrepreneurs clearly have more invested in their ideas and products than dollars and cents.

The show exposes some interesting contradictions. The Sharks are personable, yet they attack at the first scent of weakness. Kevin O’Leary, the bombastic Shark known as “Mr. Wonderful,” claims that “it’s all about MONEY,” but at times even his emotions seem to cloud his judgment. In other situations, a compelling performance by a contestant is enough to sway the Sharks’ minds, even when the sales figures don’t.

Then again, perhaps letting emotions factor into negotiations is not such a bad idea. It would probably be unwise to go into business with someone with an established negative rapport. A waffling sales pitch may indeed predict wishy-washy behavior in future negotiations, which might seriously hinder business prospects. And perhaps an entrepreneur’s “gut” is actually guiding him in the right direction when he rejects a Shark’s offer. It is, of course, impossible to know for sure, but it is this fascinating blend of calculation and emotion that keeps me swimming after this show’s bait!

~Heather Mann~

When faced with a decision (e.g., like what to do on a week night), our final decisions are based less on what options are available, and more on what options we consider.

The options that come to mind most easily are the options that form our consideration set, and then we choose from that set. The problem is that often our consideration sets are limited—we are tired, we are in a “week night” state of mind, or we have only seen advertisements for certain things lately.

To increase your happiness, keep a running “to do sometime” list of things you want to do. That way when your consideration set fails to include a highly desirable option, you can simply turn to your this list for an idea.

For the original research on this topic, see: http://www.haas.berkeley.edu/Courses/Spring2000/BA269D/Negungadi90.pdf

~Troy Campbell~

Why do shoppers get so crazy and sometimes so irrational on Black Friday? Troy Campbell visits the local mega-mall on Black Friday to find out.

Journalists, businesses, comedians, and the rest of us have been crying out to politicians, “Why so much fighting?” and asking, “Can’t we all just get along?” Despite these calls for bipartisanship and peace in Washington, the quarrels rage on. Why?

Although politicians say they wish the fighting would end, they may actually take pleasure in the brawl. It may be emotionally rewarding for partisans to be in the “smarter” and “morally superior” party.

Psychological research shows how derogating members of other cultural groups can make oneself feel superior and can even increase one’s self-esteem.

This may explain why partisans’ lives are so often full of tweeting, Facebooking, and protesting about how other parties are terrible. Such actions may be motivated more by the desire to immediately improve their self-esteem and feel self-righteous than by the desire to improve policy.

For instance, many liberals tweet claims that conservatives do not care for the poor. One explanation for this could be that liberals really do care for the poor, but they may also tweet this because it makes them feel better to be the good guy fighting for the poor compared the conservatives that they claim are evil and selfish.

Because viewing the other party as evil can make oneself feel better by comparison, partisans might actually want the other party to be evil. Conservatives may actually want Obama to be a communist and liberals may actually want Romney to be universally against women’s rights. These claims fit the self-flattering good versus evil narrative, where the opposing party is the Evil Empire and the partisan’s own team is the heroic Rebel Alliance fighting for good.

So when we ask the question, “Can’t we stop the fighting?”  The answer seems to be, “No, the self-righteous fighting is too much fun!”

~Troy Campbell & Rachel Anderson~