THURSDAY, JANUARY 17, 2019
6:30 PM to 9:00 PM-Welcome Reception (Wasatch B: Main Level, The Cliff Lodge)
FRIDAY, JANUARY 18, 2019
7:00 AM– Breakfast (Twin Peaks, The Cliff Lodge)
7:30 AM to 9:30 AM– Presentations (Twin Peaks, The Cliff Lodge)
Habit formation in energy conservation-Noah Lim*
We conduct a randomized controlled trial to test whether monetary incentives can be used to develop habits related to energy conservation. Our aim is to nudge people to save energy by inculcating a habit of setting a higher air-conditioner (AC) temperature. Specifically, we implement two interventions over the span of two periods (each period 23 days). Both interventions have the same goal of inducing subjects to increase their AC temperature by 2°C in Period 2 from their baseline temperature. Subjects in the treatment conditions are either incentivized to (i) increase their AC temperature gradually: 1°C increase in Period 1 and an additional 1°C increase in Period 2 (2°C increase overall) or (ii) increase their AC temperature all-at-once: no target temperature increase in Period 1 and 2°C increase in Period 2. Consistent with path-dependence, we find that subjects who increased their AC temperature gradually had a higher temperature in Period 2 compared to subjects who were asked to increase their AC temperature all-at-once. We also find that subjects in the gradual-increase condition sustained this higher AC temperature (relative to the control group) even after the monetary incentive was removed. The results suggest that policy makers who are interested in fostering habits related to energy conservation should provide gradually-increasing targets and allocate incentives over multiple periods.
How and for Whom the Progress Bias Limits Successful Goal Pursuit -Margaret C. Campbell*, Justin Pomerance, Caleb Warren
While monitoring how behaviors impact progress is an important part of consumer goal pursuit, monitoring is not always accurate. The present research examines how consumer goal orientation, specifically promotion focus, influences the consumer tendency to believe that goal-consistent behaviors have a greater impact on goal progress as compared to goal-inconsistent behaviors (the “progress bias”). The research further examines how promotion focus, by affecting the progress bias, negatively impacts goal pursuit. Two studies show that promotion focus, whether measured or manipulated, influences the progress bias; high (low) promotion focus exacerbates (decreases) the extent to which a consumer over-weights goal-consistent as compared to goal-inconsistent behaviors in estimates of progress. A third study finds that measured promotion focus leads to an overall progress bias for financial behaviors which then influences perceived financial well-being. Lastly, two studies show that the progress bias, and promotion focus by impacting the progress bias, decrease the extent to which consumers “means shift,” choosing an alternative means to reach a goal when making insufficient progress. Higher promotion focus and progress bias lead to lower levels of mean shifting.
Sweat Equity is Overestimated-Eva C. Buechel (University of Southern California)*, Jiao Zhang (University of Oregon), Carey K. Morewedge (Boston University)
The relationship between effort and utility is a critical determinant for economic policy and public welfare. Nevertheless, this relationship is relatively poorly understood. Traditional models assume effort is costly and aversive, but cases abound in which people value an outcome more if it requires considerable effort (e.g., DIY projects, marathons). We identify a driver of this latter phenomenon. People believe in sweat equity — that expending more effort in the pursuit of a goal increases the pleasure of its achievement. Moreover, we find that this belief is an affective forecasting error. Affective forecasters overestimate the pleasure that more real and perceived effort adds to goal achievement. In five studies, affective forecasters predicted they would be happier achieving a goal if it required more than less of their effort, whether the goal was finishing a laborious task or the production of a good. By contrast, experiencers who achieved the same goal were no happier if they expended more or less effort in the process of its achievement. We find that this forecasting error is due to the greater affect-richness of goal achievement when it is experienced than when it is mentally simulated during forecasting. The greater affect-richness of experienced goal achievement directs attention toward the goal achieved and away from the process of its achievement, thus reducing sensitivity to the amount of effort that its achievement required. Supporting our process account, affective forecasters are better calibrated to the limited value of sweat equity when goal achievement is as affect-rich during forecasts as it is during experiences.
The Vicarious Construal Effect: Seeing and Experiencing the World Through Different Eyes-Clayton R. Critcher*, Minah H. Jung and Fausto Gonzalez
That two individuals can look at the same stimulus and experience it differently speaks to the power of construal. People’s construals are shaped by their idiosyncratic attitudes, belief systems, and personal histories. Accordingly, amusing delights for children often become bland bores for adults. Twelve studies provide support for a vicarious construal effect: Considering perspectives one once had but seemingly lost, one ordinarily would have only with more experience, or one would not have had spontaneously, all exert an assimilative pull on one’s ongoing experiences.This means habituation can be slowed or stalled by considering another’s fresh perspective, desensitization can be preemptively achieved by considering another’s stale perspective, and attitudes toward an entertainment show can change by considering how fans or nonfans would see it. Blind to the power of construal in defining their experiences, participants believed they learned something new about their underlying preferences (“I never realized how much I enjoy anime films!”), not something about the experience-distorting effects of the perspective manipulations. These effects emerged in examinations of positive emotions, negative emotions, engagement, attitudes, and perceptions of humor. Considering another’s perspective also colored one’s low-level perceptions (e.g., how raucous audience laughter sounded). An experimental causal chain design showed that considering another’s perspective leads people to pose a directional question to themselves (e.g., “What would this Seinfeld fan like [nonfan dislike] about this Seinfeld performance?”), which in turn colored one’s own experience of a stimulus. Various features of the studies identified which conditions are necessary to produce the vicarious construal effect and minimized concerns that methodological artifacts or experimenter demand produced the effects. The research helps explain why social experiences often differ from solo ones, illustrates a practical technique for breathing new life into old experiences, and demonstrates how people can seemingly learn about themselves by trying to understand others.
4:15 PM to 7:15 PM – Presentations (Twin Peaks, The Cliff Lodge)
The Pleasure and Pain of Paying: Understanding How Payment Aesthetics Shape the Purchase Experience- Andrea Morales*
Despite trends to increase the attractiveness of different payment forms through appealing credit or gift card designs, it is unclear whether this strategy influences the purchase experience. We demonstrate that the incidental aesthetics of a payment can enhance the consumption experience by increasing the pleasure of paying while decreasing the pain of paying. When the beauty of the payment must be compromised through spending, however, it increases pain and consequently reduces spending and purchase satisfaction. Our work introduces the pleasure of paying construct and identifies payment aesthetics as a novel source of pain of payment.
Regret - Not Choice of a Vice - Defines Self-Control Failures-Joachim Vosgerau*
In the typical self-control experiment, participants are given a choice between a hedonic vice-food (e.g., chocolate) and a utilitarian virtue-food (e.g., fruit). Choosing the vice is interpreted as a self-control failure, exerting self-control means abstaining from hedonic consumption. We argue that self-control failures are better captured as choices that violate one’s long-term goals and induce regret. Accordingly, hedonic consumption is not necessarily a self-control failure, and self-control anomalies like hyperopia and tightwadness can easily be understood as self-control conflicts involving different goals. Five experiments provide evidence that our conceptualization captures self-control failures more accurately than choice of a vice.
The Sign Effect in Past and Future Discounting- David Hardisty*
We compare the extent to which people discount positive and negative events in the future and in the past. We find that the tendency to discount gains more than losses (i.e., the sign effect) emerges for future, but not past, outcomes. In five studies using both real events (eating delicious vs gross flavored jellybeans) with students and hypothetical scenarios (various financial and hedonic events) with MTurkers, we find that the effect of tense on discounting is mediated by differences in contemplation utility, which we define as the emotional intensity from either anticipating or remembering the event.
Anger, Perspective-Taking, and Deception- Maurice Schweitzer* and Jeremy Yip
Anger harm perspective-taking and promotes the use of deception. Across our studies, we find that individuals who feel anger are less likely to take others’ perspectives and are more likely to deceive their counterpart than those who felt other emotions including neutral emotion. We find that arousal mediates the relationship between anger and diminished perspective-taking, and that empathy mediates the relationship between anger and deception. Taken together, across different anger inductions and measures, we identify robust relationships linking anger and with important cognitions and behaviors. Our findings have particularly important implications for conflict, which is often characterized by feelings of anger, deception, and poor perspective-taking.
Drivers of Decision Inertia: Insights from History- David Gal*
Inertia is prevalent in most large institutions. Typical explanations (e.g., loss aversion, status quo bias) based on extrapolation from low stakes individual decisions in the lab lack explanatory depth. Here, I use historical case studies to provide insight into the causes of decision inertia in institutions. In particular, I identify beliefs, interests, and complacency as important high-level drivers of institutional inertia. This research speaks to the value of critical interpretation of historical evidence and its integration with research on individual decision-making in providing insight into high-level decision phenomena.
Bringing Narratives to Life: Animism, Totems and Intangible Value- George Newman*
Existing research on narratives has found that simply telling a story about an object, such as a travel souvenir or a name brand product, can increase how much people value it. The present studies examine how the value supplied by narratives may differ, depending on the type of object that is described. Drawing on field data from eBay, as well as several experiments, the current studies find that narratives enhance value more when they are connected to objects that resemble living things versus objects that are plainly inanimate. This effect arises because animistic objects increase the extent to which people feel engaged in the story, which in turn, enhances their value. This research provides insights into how narratives affect the subjective value of objects. It also connects to the work of early 20th century scholars in psychology and anthropology, who discussed animistic totem objects as an important window into the nature of people’s intuitive psychology.
SATURDAY, JANUARY 19, 2019
7:00 AM– Breakfast (Twin Peaks, The Cliff Lodge)
7:30 AM to 9:30 AM– Presentations (Twin Peaks, The Cliff Lodge)
The Beauty Penalty versus the Beauty Premium-Meng Zhu* and Joachim Vosgerau
Prior research has shown that attractive people are treated more favorably in the workplace and in social interactions than plain looking people. We conjecture that such a beauty premium may reverse for activities that require analytical skills. In Study 1 and 2, we find that attractive individuals are perceived as having better social skills but worse analytical skills than plain looking individuals. In Study 3, we manipulate the importance of social and analytical skills within the same profession, and demonstrate a reversal of the beauty-premium—i.e. a beauty-penalty—when analytical skills are more important. Unattractive professors are judged as being better researchers (a domain in which analytical skills are judged as more important) but worse teachers (a domain in which social skills are judged as more important). Our results provide support for belief-based discrimination, as beauty premiums and penalties are mediated by beliefs about individuals’ social/analytical skills.
Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors- Alex Imas*, Klakow Akepanidtaworn, Rick Di Mascio and Lawrence Schmidt
Most research on heuristics and biases in financial decision-making has used non-experts, such as retail investors who hold modest portfolios. We use a unique data set to show that financial market experts -- institutional investors with portfolios averaging $ 573 million -- exhibit costly, systematic biases. A striking finding emerges: while investors display clear skill in buying, their selling decisions underperform substantially -- even relative to strategies involving no skill such as random selling. We present evidence for limited attention as the driver of this discrepancy, with investors devoting more attentional resources to buy decisions than sell decisions. A salience heuristic explains much of the underperformance in selling: investors are prone to sell assets with extreme returns across all specifications. This strategy is a mistake, resulting in substantial losses relative to randomly selling assets to raise the same amount of money. In contrast to selling decisions, the salience heuristic does not appear to drive buying decisions, which are not affected by prior returns.
When Cherished Possessions are Offered for Rent: The Role of Emotional Attachment in Consumer-to-Consumer Rentals- Aaron Brough*
Owners often rent their possessions (home, car, bicycle, etc.) to other consumers. While the primary motive for doing so is frequently financial, some owners also seek to connect socially with like-minded consumers who share an interest in the possession. Thus, one would expect owners to prefer renting to consumers who signal a high level of engagement with the possession (e.g., using it frequently during the rental period). Paradoxically, however, we find that attached owners prefer to rent to users who signal that they would be less rather than more engaged with the possession. We explore the conditions under which this effect occurs, identifying moderators and boundary conditions. By illuminating how consumers interact in a C2C marketplace, these findings have important implications for both owners and users.
Using Reviews to Determine Preferences: How Variance in User-Generated Reviews Affects Choice - Elizabeth C. Webb * and Itamar Simonson
User-generated product reviews have become an important input in consumer decision-making (Floyd et al. 2014; de Langhe, Fernbach, and Lichtenstein 2016; Simonson 2016). Consumers are now able to use product reviews to learn about products and gather information about their options. One interesting question that arises is whether product review information affects established choice context effects. Past research has found preferences can be manipulated by context (e.g., the compromise effect) (Simonson 1989; 1990; Simonson and Tversky 1992), but how does the information in reviews affect that context?
In this research, we examine the impact of user-generated review dispersion on consumer susceptibility to context effects. We show that product reviews with greater variance/dispersion reduce choice shares for a compromise or all-average option relative to products associated with reviews with less variance/dispersion. We attribute this finding to the fact that greater review variance indicates evaluations are a matter of taste (Spiller and Belogolova 2016), thereby allowing the consumer to deviate from safe norms (e.g., compromising or hedging). Paradoxically, this means that dispersed reviews are more useful and informative and encourage consumers to follow their own tastes based on the options’ absolute values.
Overall, our empirical results suggest that customer review variance can act as an important moderator of compromise behavior. Further, review variance also determines how much consumers use and rely on product reviews, with higher variance reviews being rated as more useful and trustworthy when products have high average reviews. When variance is seen as a signal of subjectivity and personal preference, consumers are more likely to rely on their own preferences when making a choice (and are thus less likely to choose a compromise option); however, when variance is seen as a signal of quality, consumers are more likely to rely on context when making a choice (and are thus more likely to choose a compromise option). Overall, this research contributes to our understanding of the psychological processes underlying the use of online reviews and suggests that attributes of the reviews themselves (e.g., variance) can affect how and to what extent reviews are used in consumer judgment and decision-making.
4:00 PM– Afternoon snacks (Twin Peaks, The Cliff Lodge)
4:15 PM to 7:15 PM – Presentations (Twin Peaks, The Cliff Lodge)
Judgments Based on Stocks and Flows: Different Presentations of the Same Data Can Lead to Opposing Inferences- Stephen Spiller*, Nicholas Reinholtz, and Sam Maglio
Time-series data—measurements of a quantity over time—can be presented as stocks (the quantity at each point in time) or flows (the change in quantity from one point in time to the next). We find that the choice of presenting data as stocks or flows can have a consequential impact on judgments. The same data can lead to positive or negative assessments when presented as stocks versus flows and can engender optimistic or pessimistic forecasts for the future. For example, when employment data from 2007 to 2013 are shown as flows (jobs created or lost), President Obama’s impact on the economy during his first year in office is viewed positively, whereas when presenting the same data as stocks (total jobs), his impact is viewed negatively. The results highlight a challenge that accompanies the growing reliance on data and analytics for decision making within organizations: Seemingly benign choices—such as that between two informationally equivalent data presentations—can substantively impact how data are interpreted and acted upon, even though the underlying information is the same.
Ambiguity Aversion and the Perceived Nature of Uncertainty- Craig R. Fox*, Michael Goode-Menke and David Tannenbaum
A fundamental challenge to rational models of decision under uncertainty is Ellsberg’s (1961) observation of ambiguity aversion: people prefer betting on clear or known probabilities to betting on vague or unknown probabilities. Psychological research has attributed this phenomenon to reluctance acting where the decision maker feels relatively ignorant or uninformed (Heath & Tversky, 1991; Fox & Tversky, 1995). In this paper we introduce a significant enhancement to this perspective by proposing that ambiguity aversion is amplified by perceived epistemicness (knowability) of relevant uncertainty and it is mitigated by perceived aleatoriness (randomness) of relevant uncertainty. In four studies we test this hypothesis against prominent economic models that of ambiguity aversion as distaste for compound lotteries (where a draw from the unknown probability urn is construed as a two-stage lottery over possible distributions of red and black balls; e.g., Segal, 1987; Halevy, 2007). Our first study documents enhanced ambiguity aversion when participants bet on the composition of the unknown probability urn rather than a single draw from it. A second (incentive-compatible) field study demonstrates that people prefer to hedge a purely epistemic bet by mixing it with aleatory uncertainty (especially when they feel ignorant) by preferring to bet on which team will win a soccer match rather than betting on which is favored. Our third study shows that when people feel relatively ignorant people they pay a premium for a compound lottery over a simple lottery. Participants chose between $100 if they answered a trivia question correctly or a 90% chance to win $100 if they answered correctly and a 10% chance to win $100 if they answered incorrectly; the lower their subjective probability of answering correctly the more likely they were to choose the latter, dominated, lottery. A final study replicates this result and shows that it disappears when the two-stage lottery is framed to obscure the aleatory “hedge” and highlight the epistemic component.
When Consumer Choose Uncertain Outcomes: A Guilt Reduction Mechanism- Mehmet Yavuz Acikalin and Uzma Khan*
In contrast to prior research showing that consumers are generally averse to uncertain outcomes in positive domains, the current research elucidates a context where consumers may find options with uncertain outcomes more desirable than those with certain outcomes. We propose that such preference for uncertain options can arise when consumers anticipate experiencing guilt as a result of their choice. In these contexts, the choice of an uncertain option can allow consumers to alleviate the responsibility of choosing a guilt-laden option by attributing the choice outcome to chance. In support of this proposition, we show that consumers are more likely to choose uncertain options from choice sets with more guilt-inducing outcomes. Moreover, individuals more prone to attributing negative outcomes to external reasons are more likely to choose uncertain options. Finally, providing an external justification for the choice of a guilt-inducing outcome reduces consumers’ preferences for the uncertain options. Together the findings suggest a novel guilt-reducing role of uncertainty in consumer choice. Our findings contribute to extant research on risk and uncertainty aversion, self-signaling, self-control, and guilt. Finally, our research also contributes to work on decision avoidance by showing that individuals can have preferences for asymmetrical randomizers that diverge from a fair coin flip. We show that consumers can resolve the trade-off between receiving the desirable outcome and avoiding the negative self-attributions by choosing uncertain options that reveal a preference for one option over the other and yet remove the negative self-signal and potential guilt in making the choice.
Drawing Individual Utility Functions- Robert Zeithammer*
Using bidding data from an incentive-compatible laboratory experiment with name-your-own pricing, we estimate individual-level preferences in a market environment involving decision making under risk. The data rejects the canonical Expected Utility model, and instead points to S-shaped preferences that resemble Prospect Theory. In a series of what-if simulations, we document the importance of preference heterogeneity on modeling consumer bidding behavior.
Threshold Escalation in Product Lineups- Aner Sela*
Consumers are often confronted with product lineups, where they try to visually identify a previously encountered product in a sequence of similar items. In such cases, what determines their success at correctly identifying the target product? The current research finds that the longer consumers search, the more conservative judges they become, and – ironically – the more likely they are to erroneously reject the correct target when it finally appears in the lineup. We propose this happens because each time consumers examine a similar item in the sequence, and determine that it is not the option for which they have been looking, they draw a metacognitive inference that the correct target should feel more familiar than the similar items rejected up to that point altogether. This causes the subjective degree of familiarity consumers expect to experience with the true target to progressively escalate, making them more conservative but less accurate judges. The findings have practical implications for consumers and marketers, and make theoretical contributions to work on metacognitive inferences, recognition, and product search.
Two Dimensions of Uncertainty Predict Investment Forecasts and Decisions-Daniel J. Walters, Gülden Ülkümen*, Carsten Erner, David Tannenbaum, Craig R. Fox
Estimating the future returns of any stock investment is an exercise fraught with uncertainty. This uncertainty can be attributed to failures in knowledge (i.e., being unfamiliar with an industry or company; what we call epistemic uncertainty) or to random processes (i.e., asset variability; what we call aleatory uncertainty). In this paper we find that these two dimensions of subjective uncertainty are independently related to different investment behaviors. To the extent that investors attribute stock market uncertainty to failures in knowledge, they tend to make decisions based on expert recommendations and they manage this uncertainty by seeking financial advice. In contrast, to the extent that investors attribute stock market uncertainty to random processes, they tend to make decisions based on their own risk preference, and manage this uncertainty using strategies such as diversification. Importantly, investors’ attribution of uncertainty can be altered by varying how historical information is presented: We find that stock price charts impart the perception that stock uncertainty is epistemic, whereas stock return charts impart the perception that uncertainty is aleatory, resulting in dramatic differences in the amount investors are willing to pay for stock advice.
7:30 PM-Dinner (Wasatch B, The Cliff Lodge)