Tag Archives: behavioral economics

For Love of the Effort?

The behavioral economics lessons from my online course this week centered on motivation. This lecture mainly looked at motivation in the workplace, asking what, besides money, induces people to work, because the reward of money is not enough for an employee. The conclusion was drawn that people become more attached to things, tasks, ideas into which they put some effort into creating. Wow! I, being metaphorically inclined, immediately saw a connection to feeling invested in relationships.

Dan Ariely, my professor, describes this phenomenon of increasing fondness and attachment for an object through being involved in the effort of creation as “the IKEA Effect.” He has shown that people tend to value and esteem things they made even when the process is perceived as negative or the created product is of poor workmanship. Through effort, value and meaning increase.

This idea of effort leading to attachment does ring true to me on many levels. I felt like I put a lot into my relationship, so when we broke up I felt all sort of pain. I thought things like: “What a waste of time!” “I gave him so much and look what he does!” So much of breaking up was about detaching myself from the relationship, letting go of ideas, thoughts and attachments of all kinds. I had been willing to work, to put in effort and so I was the one who was most attached…I was willing to love that imperfect man and nourish our imperfect relationship because I was invested in a relationship I was helping to create.

Did I put too much effort into my relationship, leaving not enough for my partner? Am I too independent and self-motivated that no one perceives how to put effort into me? I ask these questions rhetorically, knowing they are not exactly the right questions…but intriguing to consider if that is possible.

When Ariely casually made a glib comment that tasks should “play hard to get” to keep us motivated to work on them, I had a shocking realization. I finally had a clear explanation of that little relationship game of playing hard to get which I have often refused to do! When someone “plays” hard to get, the other has to extend more effort to win a date or a kiss! Hence, the love of the chase!

Now, as I wrote this, I wanted to put a woman and a man in those roles respectively because this is how it has been described to me…men love the chase, so women have to play hard to get. But here are two questions; (1) If men are motivated by the effort of the chase, what is the great motivating effort of the women? and (2) how does this play out in homosexual relationships? During my recent break-up, my mother, in an attempt to help me, asked if I had ever considered if I were a lesbian. And (alas?) I am not. Perhaps if I were, I could be the chaser, and it would not be to my detriment. This is not about men and women, but it is about masculine and feminine.

So let me throw a wrench in the equation. This way of looking at things conflicts with some of my newly-tapped-into philosophical wisdom. From reading the Tao Te Ching by Lao Tzu, various Buddhist texts, and the material from the School of Practical Philosophy, I am learning how attachment leads to suffering! As I just mentioned, breaking up was painful, and probably because of my attachment. 

So, now my challenge, my journey seems to be to learn to love while remaining detached; to be attached only after becoming conscious that I am already detached; to be yin and yang, feminine and masculine, both the receptive and the pursuing!

Playing hard to get intentionally to tease and entice a man seems incredibly manipulative. This is not the way for me. I do not believe all men require the chase, nor do I believe women must act demure in order to find love. However, I am a go-getter in many ways, tending to take charge and lead. My dad taught me to just go ahead and do something when you see it needs doing! In this modern world, women are losing touch with their feminine qualities and men are being emasculated as we all try to balance these two elements. It would be a game, a trick to simply act demure, whereas being demure could be honest if we have reclaimed the feminine principle truly. Setting out to accomplish a goal, even bagging a man with “feminine” wiles, is still, at it’s heart, accomplished with masculine energy. As long as I am trying to get something from a man, I will be competing with his masculine energy and negating my own feminine side. How do I remember my femininity? What form can effort take that draws on this more gentle, receptive energy? There is more to The Feminine than I realize, than we realize- so, let us all open up to how to reclaim the yin in this yanged-up world. Cheers!

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Craigslist: What Am I Doing Wrong?

Funny situation presented to me from my behavioral economics course about a woman trying to trade her beauty for a man’s wealth. But she has tampered with the societal norms by making this seem like a financial transaction…she is less likely to marry who he wants now.

Psychohistory

Silly post this evening.

I don’t usually post or forward urban legends or humor emails I receive. Truth be told, I don’t get many of these any more – it’s as if the world went through 10 years of forwarding silly email as they got used to the medium, and that silliness has past.

I thought this email was fake, but I did this Google search, and I was able to verify that this was, truly, a legitimate Craigslist posting recently, and a legitimate response. So enjoy… it has exactly the right mix of humor, social commentary, and financial reference for my tast.

Here is the original Craigslist posting:

What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful
(spectacularly beautiful) 25 year old girl. I’m articulate and classy.
I’m not from New York. I’m looking to get married to a guy who…

View original post 1,524 more words


The Behavioral Economic Position on Whether You Can Get Your Ex Back

To the Irrationality which is is in all of us,

In my wonderful Coursera.org class taught by Dan Ariely, we learned about the “endowment effect,” which describes how ownership automatically ups the value of something. An example was given that if there was an extremely popular but sold-out event, the ticket holders are likely to set an extremely high monetary value for their tickets, whereas other people who wanted to attend just as much would normally set a much lower monetary value as the maximum they would spend to get a ticket from a current ticket holder.

Both groups would explain their reasons in terms of what they do have. The ticket holders would emphasize how amazing and important attending this game will be for them, helping reinforce its value to them. The would-be ticket buyers would rationalize in terms of saving their money, so maybe they could watch the event on television and pay less for refreshments, thus solidifying this as the the best option.

When I proposed breaking-up to my ex-boyfriend, he was at first extremely agitated and passionate that we try to work things out. He was focused on losing me; I was something he had, or had “a girlfriend.” I was on the fence at this point, so we tried to work it out. We couldn’t keep it going like we wanted it, so we broke up; it was mutual. We both suffered the loss of something we had during this time. I had loved having “a boyfriend” and thought he was an amazing person…yet here we were.

After a bit, I missed him too much and told him I wanted to get back together. He also missed me, but thought he shouldn’t be in a relationship for reasons I do not know. We tried to be friends. I wanted him still, or maybe I was still feeling “loss aversion,” another economics term that refers to how we are more affected by loss than we are by gain (in respective directions). I think we both were feeling averse to loss. 

However, when I brought up this issue again about getting back together, my ex had been having lots of free time which he could spend without worrying about me. He now would have to give up something to get back together with me. So feeling the endowment effect, he decided to not rekindle our relationship once and for all.

Perhaps, there is a window of opportunity, or perhaps there is a strategy of being so awesome and wonderful that he only feels the loss of you and not the gain of anything else, but I do not advise scheming when you have asked and received a clear answer. Just go deal with your loss aversion, and start to think about what you have been endowed with now that HE is gone!

A Mind full of connections


Relative Happiness and Budgets

To the small voice inside us telling us we should be thinking about the future,

Are we willing to sacrifice something we value for more happiness? Is this a simple question to answer? Whatever your initial response was, let us ponder the issue further.

Let me draw on the class material examples to help explain this. Consider the following examples:

Scenario 1a: You are buying a pen for $15 when someone says that you could get the same pen for $7 at the store 3 blocks away. Which pen to you purchase?

Scenario 1b: You are buying a camera for $1015 when someone says that you could get the same camera for $1007 at the store 3 blocks away? Which camera do you buy?

Discussion: Most people tend to choose the $7 pen and the $1015 camera even though the savings would be the same. As Dan Ariely said in his lecture on this, “Your checking account does not care where you saved $8,” but it likes when you save in general! So the relative difference in these scenarios can determine how we feel about the savings.

Scenario 2a: You are buying a $40,000 car and the salesperson says to you that you can get leather seats for an extra $2000. Do you do that?

Scenario 2b: You are a buying a $500 office chair and the salesperson says to you that you could get a leather chair for an extra $2000. Do you do that?

Discussion: This is not a perfect example, so let’s overlook its flaws to uncover its usefulness. We assume leather has some benefit and we assume you would be sitting in the office chair more. With these assumptions, it might seem somewhat irrational if you WOULD get the leather seats for your car but you WOULD NOT get the leather for the chair. The takeaway is that the price is the same, but when we are operating with large amounts of money, we tend to see add-on costs relatively as well.

Now consider this situation, which involved happiness as well…

Scenario 3: At which of the following companies would you prefer to work?

a) Highest paid employee makes $100K per year, mid-level workers are paid $95K and you are paid $90K.

b) You are paid $85K per year, mid-level workers are paid $75K, and lowest paid workers are paid $65K.

Discussion: According to studies on this scenario, most people would pick to work at the first company where you are making $5K more per year. In this same study, the participants were then asked in which company they would be happiest. This time, most said at the second option. Dan asked us, “are we willing to pay (i.e. sacrifice money) for an increase in happiness?” He answered for us with a depressing, “Usually not!”

What are the implications that come to mind when you muse on these situations? Are you surprised by anything here? I was shocked and horrified to some degree! I see the common person making so many bad decisions with their money these days, and I know many people who are playing with their own happiness in such a way as well.

My generation, however you want to describe it (I am 29), is not a very happy or financially well-prepared for the future. I include myself in this classification. I have been spending my money as it comes in, only occasional having to forego something because I wanted something else. But I am still living too much above my means! Thanks to this class I am using a budget more rigorously which includes saving money monthly. I am already worried about the month of April! I highly recommend the envelope method of budgeting, so you have a very tangible amount available for different categories.

Financial planning aside, I am very concerned about how I, and others, make decisions about happiness. I recently went through a break-up and have been trying to accept what happened and also understand it. Both of us were experiencing our own forms of unhappiness, and we had to each decide whether we wanted to persist with the relationship and try to address the issues we were having (believing that our relationship would ultimately bring us more happiness in the future) OR cut our losses, make no sacrifices, face no additional challenges (believing that our singleness or a future relationship would better serve our happiness). My decision was I wanted to work out our problems and his was to cut our losses. hence we are apart. Will we ever know if we made the right choice? Could it be possible that we both did? I believe that I will find happiness again, but I still believe we BOTH would have benefited from working on our relationship…but I think at this point in his life, he is perhaps not willing to make the sacrifice of his personal time/pursuits for his long-term goals of having a relationship. If I may suggest, he is, in fact, not investing in his future, preferring rather to spend his time on what he wants NOW!

To carry the metaphor perhaps too far… I am still in the process of freeing up my Investments in order to reinvest in something with a better return!

Cheers!

Another mathematically-minded, metaphor-making Mind

Thanks to my behavioral economics class for the inspiration for this post: Dan Ariely’s A Beginner’s Guide to Irrational Behavior


A Behavioral Economics approach to a Break-Up?

To other questioning Minds,

I have been taking a wonderful class through the Coursera.org website on irrational behavior. My professor is Dan Ariely, a leading researcher in Behavioral Economics. He began his career by examining patients perceptions of painful procedures. He had personally observed that all the nurses choose to complete the specific procedure as quickly as possible even if that meant more intense pain. He discovered that they believed they were correct that this way would be better than a longer, but less intensely painful procedure.

After doing many extensive tests, Ariely discovered two significant things. First, most people declared that they too would prefer the short/more intense procedure over the the longer/less intense one when given a hypothetical scenario. However, his second discovery clearly demonstrated that patients who had the shorter/more intense procedure indicated significantly more negativity than those who experience less intense pain over a longer time. He concluded that intensity is more of an indicator than duration in these case. So don’t rip that band-aid off to fast!

This had me wonder if there would be a similar occurrence between physical pain and emotional pain. Would longer periods of emotional pain that had less intensity of feeling perceived as preferable to short and intense bouts of high emotional pain?

Consider this as just food for thought: Would you prefer a fast, quick but extremely emotional break-up, or would you rather have your relationship die a slow death?

From my experience, the worst experience I had was the one that I had no warning about, which happened quickly and more completely uprooted my life. The other relationships had warning signs, and I was in prolonged contact with my ex as we sort of slowly extracted from each other in stages. I am NOT saying that this has any bearing on how much I loved each of these men. I am merely describing the break-up experience. In fact, the man with whom I had the worst break-up was probably the least well-matched to me…(or is that part of my perception of him now BECAUSE we had such a hard break-up?)

Another piece of this interesting study by Ariely was that people who went from high levels of pain to low levels had a more positive opinion of the procedure than those who ended on an intense pain level. This seems to support the idea that if it is all possible to “complete” your relationship (see my reblog of http://bit.ly/X4HmX4) on a high note!

This is a limited pool of data to draw from, but if any of you have opinions on this as a hypothetical or can draw on your own experience, I would be very interested in how you perceive your past break-ups! Perhaps, there is some irrational behavior going on when we try to go off our exes cold-turkey style!

Thanks for reading,

this Mind

p.s. See more of Dan Ariely on his website: http://danariely.com/


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