Let’s pick a topic. Any topic. How much would you say you know on that topic? More than average? How much do you think you need to learn in order to become well-versed on that topic? Not a whole lot? You just may be experiencing what is known as the Dunning-Kruger Effect. It is a mental bias that seems to afflict people who are unskilled or not very knowledgeable. They routinely make poor decisions because their lack of competence itself denies them the ability to realize their lack of competence. It happens to a lot of us in certain areas like personal financial planning.
Several popular books have appeared over the last few years on topics related to consumers, behavior, psychology and economics. Perhaps the most popular are the ones by Malcolm Gladwell. While most use academic research liberally to make their points, relatively few have actually been written by an academic. The reasons are twofold. One, you need an academic who has done sufficient research in an area that is worthy and of interest to the general public and two, you need good writers for lay readers. That combination is hard to come by -- which makes The Art of Choosing an unusual and interesting book. It was written by Sheena Iyengar, a professor at Columbia University Business School and deals with a topic we are all familiar with – choice. She has spent a couple of decades studying this topic and is hence eminently suited to write on it. The fact that she is blind makes it almost awe inspiring to read.
In casual conversation do you use terms like “Up North” and “Down South”? Why? Is north vertically higher than south? Of course not. It is just a common usage of language that we are used to, right? But does it have any consequences for behavior? Research has shown that people often make mistakes in travel related judgment, especially when estimating time and distance. Research has also shown that people associate vertical position with meaning. For example, people are faster to identify the relationship between words like “basement” and “attic” when the word presentation is consistent with their spatial relationship (“attic” above “basement”). Given all that, is it possible that people may consider traveling north to be longer or costlier or more difficult than south bound travel simply because we think of it as being “up”? That is the research question.
Back in the stone age when DVRs did not exist, everyone had to watch TV programs when they were broadcast. Many people still do and so can’t avoid commercial interruptions. Those who record their programs avoid commercials by fast forwarding through them. Why? Because commercials are usually annoying and it is more enjoyable to just watch the show, right? Maybe not, say some researchers. They argue that there is reason to believe that people’s enjoyment of certain shows will decrease over time and commercial interruptions can actually make the show more enjoyable. Research has shown this happens with many positive experiences such as enjoyable scenery, ice-cream, music and even winning the lottery. So, why not with TV watching?
Does a person’s physical attractiveness influence their selection of romantic partners? Yes, of course. There is anecdotal and research-based evidence to support that. But there are several related questions that arise and require urgent answers. A group of researchers set out to find some answers using data from the website HOTorNOT.com and some common analytical techniques. Admittedly, this is not the most representative sample in the world, but for this purpose is quite acceptable. Let’s take a look at the questions and the answers.
In his most recent book, Outliers, Malcolm Gladwell talks about the 10 year rule -- a minimum of about 10 years (or roughly 10,000 hours) of work is needed to gain expertise in any area. While the idea originates from research in the early part of the 20th century, the rule itself was formalized by Nobel Prize winner Herbert Simon and a colleague based on their study of chess. The definitive review and experimental confirmation comes from a great article in the nineties by the psychologist K. Anders Ericsson (a student of Simon) and colleagues. It is a very interesting article with plenty of information and gets to the basic idea of how to become an expert performer.
Sports fans and announcers often talk about hot streaks of particular players - times when a player just can't miss. This phenomenon is supposedly seen in multiple sports and some players are in fact described as "streaky" players. How true is this? Are there hot streaks in sports? Can one objectively test the presence of a streak? Researchers have been looking into this for more than two decades and have found precious little evidence for the presence of hot streaks. At least not anywhere close to the frequency with which the term seems to be used in modern sports. We will take a tour of the pioneering research in this area which used basketball data, as well as some more recent research that spanned other sports. Across the American sports horizon it appears that Joe DiMaggio may have in fact been as special as his legend implies.
On the TV show Lie to Me, the lead character confidently declares that on average people lie three times in a ten minute conversation. He is a deception consultant who excels in reading micro expressions on people's faces to determine if they are lying. This character is based on the renowned psychologist Paul Ekman, whose work revolves around the idea that facial emotional expressions are universal and can be analyzed. He is the scientific consultant on the show and in fact deconstructs each episode in his blog, The Truth Behind Lie to Me. But given that it is a dramatic TV show, Lie to Me focuses on people with strong motivation to lie. Would everyday people with no specific motivation still engage in dishonest behavior when given the opportunity? Apparently the answer is yes given the real cost to the economy of low level dishonesty (returning clothes after wearing, taking office supplies, inflated insurance claims etc) which runs into billions of dollars a year. But what explains this behavior? Interesting answers were found by three researchers who ran a series of experiments to investigate this issue.
It is election day and you do your civic duty by going to your designated polling place, standing in line, chatting with a couple of nice people, drawing the curtain and pulling the lever. Do you notice where you have voted? Of course, it's at your local school (or church or firehouse). Did that have any iaanfluence on how you voted? Of course not, right? Not so fast. New research (by Jonah Berger, Marc Meredith and Christian Wheeler) indicates that the type of polling place can have a subtle effect on how people vote. The impact is small but it is there in both a controlled lab experiment and in a noisy real-world environment.
OK, so Jeopardy! cannot possibly explain all the differences between the genders, but it helps quite a bit in understanding financial risk taking because of its unique format. Researchers studying gender differences in risk taking have known that men and women are different in several ways. For example, in general men are more willing to take risks, single women allocate less wealth to risky assets compared to single men, women have lower risk tolerance on health and retirement issues, women prefer broader insurance coverage than men, and men are more active in stock trading. But is it just gender or are there other factors mixed in with gender that influence financial risk taking? For example, would competence have an impact and how does that vary by gender? This was the issue studied by three researchers using data from the game show Jeopardy!
