Duckworth and Gross (2020), "Behavior Change"

Angela L. Duckworth and James J. Gross, “Behavior Change.” Organizational Behavior and Human Decision Processes 161: 39-49, 2020.

• Suppression of impulses is a mug’s game. But changing the environment and adopting strategies concerning how we react hold promise.

• The requisite changes might be self-initiated, or initiated by others, such as employers or the government. Notice that self-deployed strategies require that people be sophisticated about their self-control shortcomings.

• Please put aside problems that arise from lack of knowledge or skill. This article is devoted to looking at situations where "we know what we should do and how to do it [p. 40]." 

• How to overcome the fact that  (temporarily) tempting options might get chosen over alternatives that are preferred by our more considered selves? The authors outline the "process model of behavior change" to point to methods where the "larger later" option is not sacrificed to the temporarily appealing "smaller sooner" choice. Here's their Figure 2 (p. 40) that outlines the process model: 

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• Habits or self-adopted strategies might allow you to skip the appraisal stage, leading to an automatic response when a familiar situation enters awareness. Giving into temptation, then, is not the done thing, it doesn't present itself as a viable alternative. 

• But sometimes you both want to take the stairs (for exercise) and want to take the elevator (because you are tired). What can be done to encourage stair-taking or other types of physical exercise?

• The process model suggests that you could try to alter the situation, alter where you put your attention, and/or alter your response strategy – or try to inculcate one of those automatic responses that skips the appraisal stage.

• You could begin the day by putting on comfy shoes; you could do things that would make the lazy alternative less available, like not bringing your car keys or bus pass. 

• You could keep track of your steps and adopt a so-many steps per day goal.

• You could reframe the time-consuming walk as “an energy break.”

• You could adopt (and possibly publicize) a rule that you always walk.

• Others can help. For instance, employers can make the stairwells more inviting, or promote the social norm/company culture of  stair use. 

Collard, Walford, Vernon, Itagaki, and Turk (2020) on Endowment, Ownership, and Culture

Philip Collard, Alexandra Walford, Lucy Vernon, Fumihiko Itagaki, and David Turk, “The Relationship Between Endowment and Ownership Effects in Memory Across Cultures.” Consciousness and Cognition 78, February 2020, 102865. 

• One manifestation of endowment effects is that people require more money to part with an owned item (willingness-to-accept, WTA) than they are willing to pay (WTP) to acquire such an item if it is not yet owned – as if the mere fact that you own something raises its value to you. 

• Prospect theory offers one explanation for endowment effects: things you own become part of your reference point, so to “lose” them is particularly painful, thanks to loss aversion. 

• But maybe the endowment effect is not about loss aversion, perhaps it is about your identity being connected to owned items. You have a positive view of your self-worth, so things that become associated with your self become more valuable in your eyes. Ownership of items also has been connected with an increased ability to remember the item down the road. 

• Hmm, but maybe in some cultures people are not so wrapped in self-worth that they raise the value of stuff they own because it is connected to them? Maybe cultures differ, too, in how much ownership of an item increases the ability to recall the item? 

• Experiment 1 (n=32): eight household goods are divided into two equally-valued sets of 4 items each, where those equal values are based upon student valuations collected in a pre-experiment. A participant is told that they own one of the sets but not the other. Then each of the eight items is shown, and the subject indicates how much they would be willing to sell the item for (if they “own” it) and how much they would be willing to pay for it (if they don’t own it). 

• The 32 British undergraduates showed an endowment effect: they were willing to pay on average 9.25 pounds for the unowned set, but would have to be paid 10.65 pounds to part with their “owned” items. But would a similar endowment effect be identified if the experimental subjects were not British but Japanese? 

• For Experiment 2, 61 British undergraduates were recruited, along with 52 Japanese undergraduates. A version of Experiment 1's endowment task was performed, along with new ownership and memory tasks. In the endowment experiment, the Japanese students showed no endowment effects, but once again, the British did. (The endowment task was not identical in the UK and Japan for an unexpected reason: one of the everyday items that made up part of the sets of goods was not available in Japan! "For the Japanese participants, the spatula was replaced with a ladle as the former item was not available locally [p. 4].") 

• As for remembering the items, the British subjects were much better for the items they “owned” than for ones they did not own, but the Japanese showed no difference in recall based upon ownership. Further, British subjects (but not the Japanese) showed a positive correlation between their endowment effects and the impact of ownership on their recall. 

 • Maybe these (British) endowment effects are not about loss aversion, but rather about connections to self?

Balasubramanian and Cashin (2019) on Gross National Happiness in Bhutan

Sriram Balasubramanian and Paul Cashin, “Gross National Happiness and Macroeconomic Indicators in the Kingdom of Bhutan.” IMF Working Paper WP/19/15, January 2019.

• The population of Bhutan is about 735,000 people, who are much influenced by the state religion, the Vajrayana tradition in Buddhism. "At the core of this philosophy are the key components of compassion and respect for all, and for the government to take care of its citizens [p. 3]." [The promotion of GNH has not stood in the way of alleged horrific behavior towards the ethnic Nepalese population in Bhutan, particularly in the 1990s.]

• Since 1972, Bhutan has emphasized Gross National Happiness (GNH), not Gross National Product (GNP) (or Gross Domestic Product), and that emphasis is now enshrined in Bhutan's Constitution. The Bhutanese commitment to GNH does not imply that GNP is shunned as a development indicator. 

• Pillars of GNH: (1) sustainable, equitable development; (2) cultural promotion; (3) environmental protection; and, (4) good governance. The Bhutanese also apply their GNH approach within nine more specific domains, such as health and the allocation of time. 

• Despite a rather phenomenal increase in per-capita income over the past forty years, GNH in Bhutan has not risen much -- shades of Easterlin. A report on Bhutan's 2015 GNH survey is available here.

• Men are significantly happier (on average) than women in Bhutan; urban dwellers are happier than rural folks. The least happy occupation in Bhutan is farming. 

• Poverty reduction in Bhutan has been significant: "the poverty rate in Bhutan has declined from 23.2 percent in 2007, to 12 percent in 2012, and further to 8.2 percent in 2017 [p. 20]." Urban poverty is quite small. 

Schwartz and Cheek (2017) on Choice, Freedom, and Well-Being

Barry Schwartz and Nathan N. Cheek, “Choice, Freedom, and Well-Being: Considerations for Public Policy.” Behavioural Public Policy 1(1): 106-121, 2017.

• A (misleading?) syllogism: more freedom means higher well-being; more choice means more freedom; therefore… 

• Nudges constrict freedom of choice 

• Should we maintain free choice (possibly even force people to make choices, as opposed to setting a default, for instance), or promote better choices? 

• The availability of options is increasing in much of the world. But more options can: (1) paralyze; (2) spur regret and dissatisfaction; and (3) undermine the (objective) quality of decisions. 

• Choices can (1) satisfy our preferences; (2) serve as utilitarian means to our ends; and, (3) express something about us. Pleasure (1) and utility (2) both can be undermined by large choice sets. 

• Expanded choice sets provide new options for (3) self-definition. This seems desirable. But they also can increase the expressive stakes for trivial decisions, and those increased stakes need not be beneficial. [Who wants to be judged on what brand of soda they buy?]

• Further, large choice sets might divert increased attention to decisions about material goods, to the detriment of social connections. 

• [Warning!: broad-brush cultural commentary to follow:] Western cultures tend to understand people as individuals, and believe that good societies give wide scope to individualism. Large choice sets, then, are requisite for self-realization. More collectivist societies (including working-class America?) might focus on the interdependencies among people, so that a person’s relations are more important than individuality. People in such societies might prefer reduced choice sets. 

• Older people seem more comfortable with fewer choices, while younger people prefer large choice sets in domains in which they are confident that they can make competent choices. 

• A perceived lack of competence more generally detracts from the desirability of large choice sets – and the competence shortfall might concern knowledge of one's own preferences. 

• Large choice sets can involve a cognitive burden, and might be worse for people already facing resource scarcity. 

• Perhaps the right policy intervention is to encourage people to think through when they are most interested in making careful choices.

Bosman, Hennig‐Schmidt, and van Winden (2016) on Power-to-Take Games

Ronald Bosman, Heike Hennig‐Schmidt, and Frans van Winden, “Emotion at Stake: The Role of Stake Size and Emotions in a Power-To-Take Game Experiment in China with a Comparison to Europe.” CESifo Working Paper Series No. 5858, April 19, 2016.

• In the two-player power-to-take game, Player A indicates what percentage of Player B’s monetary endowment Player A will claim. 

• Player B learns of A’s claim, and then can choose to destroy some or all of her own endowment. Whatever is left after the destruction, Player A receives the chosen percentage of it, while Player B retains the remainder. 

• Power-to-take is sort of a generalized version of the ultimatum game, and in particular, it allows Player B to have intermediate responses, in between accepting Player A’s suggestion or destroying the entire “endowment.”

• Three conditions: China Low (stakes), n=36; China High, n=36; and, EU, n=40. The results for the two China treatments are similar. 

• Take rates in China average more than 50%; while most people do not destroy any of their endowment, the average amount of destruction is considerable, more than 20%. Higher take rates lead to more destruction. 

• Higher take rates strengthen negative emotions in Players B, and it is possibly worse with higher stakes.

• Destruction decisions seem to be mostly driven by emotions.

• The results, including emotional responses, seem to be similar in China and Europe.

Wang, Rieger, and Hens (2017) on Culture and Loss Aversion

Mei Wang, Marc Oliver Rieger, and Thorsten Hens, “The Impact of Culture on Loss Aversion.” Journal of Behavioral Decision Making 30: 270-281, 2017.

• Wang, Rieger, and Hens look at loss aversion in 53 countries. The underlying notion is that emotions are implicated in loss aversion, but the display and regulation of emotions is culturally influenced.

• In their data, higher (nationwide) levels of loss aversion are connected to: individualism; “power distance” (which means strength of social hierarchy, according to Wikipedia); and masculinity. A fourth factor, uncertainty avoidance, is less meaningful. These factors are drawn from a 2001 book on the consequences of culture by Geert Hofstede. [But it seems the subsequently expanded Hofstede criteria might be even more connected to loss aversion. Again, from Wikipedia: “Independent research in Hong Kong led Hofstede to add a fifth dimension, long-term orientation, to cover aspects of values not discussed in the original paradigm. In 2010, Hofstede added a sixth dimension, indulgence versus self-restraint.”] 

• Loss aversion is measured by the answers to two questions. If you have a 50% chance of losing $25, and a 50% chance of winning x, how high does x have to be for you to agree to take this bet? The second question replaces $25 with $100. The loss aversion parameter is determined by dividing the answer by the stakes (25 or 100), and the overall measure averages the two stake-differentiated results. 

• The survey is given to college students and the stakes are expressed in ways that, for students, are comparable across countries. Georgians have (easily) the highest loss aversion, at 7.5, with a few countries (Luxembourg, Bosnia, Tanzania) around 1 (no loss aversion). The mean across countries is 2.0. Eastern Europeans have the highest loss aversion, and Africans have the lowest. 

• Women tend to be more loss averse, even though an increase in “masculinity” brings higher loss aversion. A greater percentage of Orthodox Christians leads to more loss aversion in a nation. 

• Economic factors don’t seem to matter: it is culture, not the economy, that drives international differences in loss aversion.

Will Wilkinson (2007) on Happiness and Policy

Will Wilkinson, “In Pursuit of Happiness Research: Is It Reliable? What Does It Imply for Policy?” Policy Analysis no. 590, April 11, 2007.

• Wilkinson challenges three claims: (1) the US-market style approach and restricted welfare state are bad for happiness; (2) positional externalities justify progressive taxation; and, (3) economic growth is unimportant for happiness. 

• Do people understand their own affective states? If we have neural habituation, no. We can feel terrific and not notice. Think of all those people who were constantly suffering before antibiotics and other medical advances. 

• We can be sad and happy simultaneously. Happiness itself is multidimensional; even happiness researchers can’t agree on how to measure it. 

• Asking if it is better to live in Denmark or the US is a bit like asking whether it is better to live in the city or the country. It depends. The US actually ranks pretty high in measured happiness, incidentally. 

• There isn’t much evidence that lower inequality, a more advanced welfare state, or higher government spending, raise subjective well-being, even among the poor or the left-leaning. 

• While income inequality has been rising of late in the US, inequality in happiness is falling. 

• Economic freedom is a strong correlate with subjective well-being. 

• Culture allows us to embed status-seeking within positive sum environments.