O BEHAVE!Issue 26 • May 2016

A Note from the Authors 3

Bias of the Month 4

Keep Your Frenemies Close 5

The New Uber Guru of Behavioural Science 6

The Moral Imperative 7

Eureka! You’re Probably Right 8

Real Life Nudge of the Month 9

Upcoming Events 9

CONTENTS

A NOTE FROM THE AUTHORS

Two years ago, we started O Behave! as a way to keep the Ogilvy Change team up to date with the latest research in cognitive and social psychology and behavioural economics. When we decided to send our roundup of recently-published research papers to our community, we were overwhelmed with the support and positive feedback we received.

Sadly, this is the last issue the two of us will be writing, but there is much more to look forward to from our Ogilvy Change colleagues, including a podcast live from Nudgestock.

Thank you for reading and farewell!

Cíosa and Juliet

KEEP YOUR FRENEMIES CLOSE

As a species, we tend to be overconfident about our own talents and abilities. We’ve all been amused by stats that 95% of people think they are better drivers than average, probably while thinking of someone we know – but never, of course, ourselves. New research from the Media Lab at MIT has even more damning consequences for our overenthusiastic egos: only about half of your friends like you as much as you like them. Taking a group of undergraduate students, Almaatouq, Radaelli, Pentland and Schmueli (2016) asked each participant to rate everyone else in the group on a scale from 0 (strangers) to 5 (best friends). The results of this survey found that only around 50% of friendships were reciprocal. Even more distressingly, the authors ruled out the possibility that these results were caused by a few socially awkward outliers, rating everyone as friends or not, regardless of their actual relationship. Analysis at the individual level revealed the data was normally distributed, with a mean of 0.5. Worse still, participants predicted that the relationship was reciprocal (that theparticipant in question would say the same) 94% of the time. Yikes.

Almaatouq, A., Radaelli, L., Pentland, A., & Shmueli, E. (2016). Are You Your Friends’ Friend? Poor Perception of Friendship Ties Limits the Ability to Promote BehavioralChange. PLoS ONE,11 (3).

Aside from being soul-destroying, these findings can have important implications for behaviour change interventions that rely on interpersonal relationships. The power of social norms has been demonstrated repeatedly in a variety of settings; for example, one study found teenagers were 1000% more likely to start smoking when two or more of their friends smoked, compared with only 26% more likely if their parents did. Nicholas Christakis has demonstrated that a wide range of behaviours are transmitted through social networks, from weight gain to voting habits. This study casts doubt on the real power of people who are recruited in research and campaigns as ‘influencers’: their social circle could be half the size they believe it to be, and their influence even less. There is also evidence to suggest that the direction of the friendship is important; you are much more likely to be influenced by someone you consider a friend than someone who considers you one. This is important to take into account when using social influence in a campaign – and perhaps when sending your Christmas cards.

Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47 (2), 263-291.

BIAS OF THE MONTH

Loss Aversion

One of the central tenets of behavioural economics, as posited in Kahneman and Tversky’s Nobel prize winning prospect theory, is loss aversion: we are more driven to avoid loss than to pursue gain. In fact, we find losses twice as painful as we find gain pleasurable.

While this classic behavioural science principle is nothing new, the way it is currently being applied by a certain businessman-turned-politician could have huge ramifications for the entire world, should he be elected. Donald Trump’s campaign has emphasised loss over all else – loss of jobs, loss of control, loss of America’s once-great status. This is unusual for a political campaign: think of Obama’s ‘Hope’ poster of 2008, which is a much more common tactic. The negativity of Trump’s campaign may be responsible for its unexpected success. For example, 70% of Trump voters polled said they were very worried about the state of the economy, compared with only 45% of Democrat voters. People evaluate their situation relative to a reference point, and for many Trump supporters, this reference point is a time – real or imagined – when their lives were better.

Choosing a risky candidate like Trump is also consistent with risk-seeking behaviour associated with avoiding losses. Though people tend to be risk averse when considering gains, the threat of losses leads people to select risky options in an attempt to minimise them. For example, when given the choice between losing £500 and a 50% chance to lose £1000 (or nothing at all), most people choose the gamble. Trump represents a similar gamble in the minds of voters, who could see him as their one chance to make America great again.

THE NEW UBER GURU OF BEHAVIOURAL SCIENCE

The beauty of Uber is that there is never one too far away when you need it, no matter what the time; whether you’re coming out of a busy nightclub in central London on a Saturday night, or on a Sunday morning when everyone else is in bed. But how does Uber ensure that when there is high demand, there is also high supply? How do they incentivise lots of drivers to come out and work when there is high demand? The answer is surge pricing: Uber charge more when demand is high, therefore incentivising all the drivers to come out and work. This makes perfect sense from a purely economic viewpoint and benefits the drivers, but there are two groups Uber need to incentivise in order for their business to work: the driver who benefits from surge pricing, and the passenger who might be put off by it.

The idea of unfairness triggers a strong negative emotional reaction in people (and monkeys, suggesting there is an evolutionary component to this response) which all businesses need to be wary of. If customers feel like a company is treating them at all unjustly, they can lose that customer within a millisecond, which is exactly what the new behavioural scientist at Uber Keith Chen has found.

Interview: Hidden Brain May 2016

Looking at user data, Chen found a significant round number effect: “When the surge moves from 1.9 times the normal fare to 2.0, you see six times larger drop in demand than you saw from going from 1.8 to 1.9. The amount more that you’re paying for the trip is the same between those two steps, but 2.0 just feels viscerally larger to people.” The data has also revealed that people are more likely to order an Uber when it is 2.1 times the rate than 2.0. Yes, you have read that correctly: people would rather pay more for an Uber than accept a round number surge charge. It has been hypothesised that the reason people are more accepting of a specific surge charge rather than a round number is due to fairness. A specific non-round number signals that there must be a reason for it; algorithm must be set up to come up with that price and it is therefore somewhat justified. A round number, on the other hand, feels like someone just pulled it out of the air, which ignites a feeling of unfairness and is therefore something people don’t want to support.

THE MORAL IMPERATIVE

We all have opinions and beliefs but these are not stable, which is why advertisers, politicians and so on put a lot of effort into trying to sustain or change them. There has been a plethora of research on how to change an attitude or belief, but much less on how to sustain them. A new study released this month from Ohio State University has in fact found a way to strengthen an attitude: by simply telling people it is based on morality. This research found that telling people that their attitudes and beliefs were based on morality made them stronger and more resistant to counterarguments.

Luttrell, Petty, Brinol and Wagner’s (2016) first experiment involved 183 college students reading an essay favouring the adoption of a senior exam policy at their university, which they were asked to share their thoughts on. The researchers told the students that the opinion they expressed was either based on morality, tradition or equality. Participants were then asked to rate how willing they were to sign a petition in favour of an exam policy and state which way they would vote on theissue. When looking at the actual behaviour the partipants engaged in, those who were told that their attitude toward the exam policy was based on morality were more likely to act accordingly than the students who were told their attitude was based on tradition or equality.

Luttrell, A., Petty, R. E., Briñol, P., & Wagner, B. C. (2016). Making it moral: Merely labeling an attitude as moral increases its strength. Journal of Experimental Social Psychology, 65, 82-93.

The second and third experiments sought to discover how susceptible people’s attitudes were to change, in this case in relation to recycling. Participants read a passage about this topic, mostly giving positive views afterwards. Again researchers told them their attitude was based on morality or the practicality of recycling. The participants were then asked to read a short piece with persuasive arguments against recycling and again report their attitude. The researchers found that those who were told their attitude was based on morality were less likely to change their minds than those who were told their opinion was due to practicality. These studies show that people are more likely to act upon their attitudes and less likely to change their attitude when surrounded by persuasive counterarguments when they think their opinion is based on morality. This is an important finding that advertisers and politicians should take on board if public attitude favours them and they want them to act upon it.

EUREKA! YOU’RE PROBABLY RIGHT

“Eureka!” is the exclamation made by Archimedes after stepping into a bath, and realising the water displaced must be equal to the volume of his submerged limbs; a discovery which allegedly led him to leap out of the tub and run through Syracuse, still naked. We’re all familiar with the eureka moment – when a sudden flash of inspiration hits us, often while we’re doing something completely different – although far fewer of us can claim this has led to streaking in the streets.

New research by Salvi, Bricolo, Kounios, Bowden and Beeman (2016) has explored these aha! moments to determine whether or not they are trustworthy. Participants were given a series of puzzles to complete under time pressure, and asked whether they had been solved using a rational methodology or if inspiration had suddenly come to them. These puzzles were both linguistic and visual, including tasks like finding a connecting word for a series of others, such as “pine”, “crab” and “sauce” (the answer is “apple”, by the way). For these types of linguistic puzzles, they found that aha! answers were correct 94% of the time, whereas the rational approach was correct only 78% of the time.

Salvi, C., Bricolo, E., Franconeri, S. L., Kounios, J., & Beeman, M. (2016). Sudden insight is associated with shutting out visual inputs. Psychonomic Bulletin & Review, 1-6

The time pressure also had an interesting effect on their results. As you may expect, the proportion of incorrect answers increased in the last five seconds, as people reacted to their impending deadline. However, there was a marked difference between the two schools of thought: people relying on these instinctive answers were more likely to miss the deadline, waiting for inspiration (and the correct answer) to arrive, while the rational thinkers adhered to the timings but were more likely to submit an incorrect answer.

For those looking for creative solutions to business problems, this could have important consequences. It could be that hard deadlines receive less intuitive answers that may be less likely to be effective, and perhaps soft deadlines are often better to allow for creative thinking. However, there are limitations of the study: there is a defined right or wrong answer in these puzzles, which is rarely, if ever, the case in business. There is also still no understanding of how the eureka moment operates, and if there is any way to harness or speed up this effect. But at least, for the most part, we don’t have to worry about people running around in the buff as a result.

Spotted: Unintended Consequence of Social Norms

REAL LIFE NUDGE OF THE MONTH

UPCOMING EVENTS

Behavioural Exchange 2016Monday 6th – Tuesday 7th JuneHarvard University

Behavioural Boozeonomics with the London Behavioural Economics NetworkMonday 13th June, 6.30pmThe Comedy Pub, Piccadilly

Nudgestock 2016Friday June 10th, 10.00am – 6.00pm Folkstone, Kent

We are all social creatures and look to others’ behaviour to guide our own. Although we like to think we are independent, in reality we follow the actions of other people. For this reason, highlighting what behaviour other people engage in (social norms) can be a powerful tool to get others to engage in this behaviour. Because norms can be so powerful, we need to be careful how we use them. Jeremy Corbyn has illustrated how not to use them on Twitter. Giving the high number of people between 18-24 that have not registered to vote for the EU referendum will not have the effect he presumably intended. Instead of encouraging people to register, people are more likely think, “Oh, a significant number of people like me haven't registered, it must not be that important – I won’t bother either.”

Cíosa Garrahan@CiosaGarrahan

BROUGHT TO YOU (ONE LAST TIME) BY

Juliet Hodges@hulietjodges