6 December 2012

Ups and Downs of Psychological Distance

We have learned in school that distance is spatial. For example young people in Europe learn that Australia is far away and North Africa is close by. These terms “far away” and “close by” are based on the physical distance measured in kilometers (or miles for the British).

Another kind of distance that is embedded in popular culture regards time. We don’t generally perceive time as being physical and if we are asked to associate distance and time it is not exactly intuitive. At the same time, when we refer to events in the past or in the future we add elements that are related to distance. We say that something has happened in the distant past or something will happen in the distant future. Similarly we use expressions like ‘A long time ago” or “Far into the future”.

Psychological distance refers to how a person perceives an object, event, action etc. In essence if we perceive the “thing” in detail then the psychological distance is small. If we perceive the “thing” more abstract then the psychological distance is large.

Psychological distance has several dimensions. Firs, and most obviously, there is the physical dimension of psychological distance. For example Europeans in general have a quite abstract view on Australia, whereas the same people have a pretty detailed view on their own country or city.

Second, there is the time dimension. We perceive “things” now in detail, whereas things that have happened in the distant past (20 years ago) or that will happen in the distant future (50 years from now) in an abstract way.

Third, there is the likelihood dimension. We perceive highly likely events in more detail, while highly unlikely events are perceived very abstract. For example people in The Netherlands perceive a rainy day in its smallest details (it rains a lot in this country), but a rainy day in the Sahara desert is perceived very abstract.

Fourth, there is the hypotheticality dimension. We perceive real things in detail, whereas hypothetical things are perceived more abstract. For example everyone can perceive in detail a cat but a fish that travels in space is perceived more abstractly.

Fifth, there is the social dimension. Each of us perceives things that happen to one’s-self in detail, whereas things that happen to others are perceived more abstractly. Another instance where the social dimension of psychological distance is present is the in-group vs. out-group or in more simple language “us vs. them” situation. For example an Italian will perceive in detail what is happening to another Italian, but will perceive more abstractly what is happening to a Norwegian. It has to be acknowledged that the in-group can be constructed at different levels. For example Italians in comparison with Norwegians is an in-group, but Italians that support A.S. Rome and Italians that support Lazio Rome are sworn enemies.

Psychological distance is very important for decision making and behavior. I will point out a few influences that it has on both decisions and behavior.
First, let’s take the time dimension of psychological distance. One implication of psychological distance is that some of our decisions that are made now have consequences for the future. For example a pupil might decide to play now and not study and the consequence of this decision will be in the distant future when she will apply for college.

Another implication of the time dimension of psychological distance regards plans and decisions about the future. Because we perceive future events more abstract we tend to ignore many factors. The most common flaw of planning is that we overestimate the resources that we will have in the future. As Dan Ariely says “we are all wonderful people in the future”. When we make a decision about the future are inclined to be (very) unrealistic. For example many people say things like “Next year I’ll lose 10 kilos” or “I’ll start studying next Monday”. However, when next year or next Monday comes we tend to find some other more important things to do.

This overestimation of future resources can be used to guide decisions and behavior. For example if you are asked if you would save more for retirement starting today and put away 100 Euros per month, most likely you will say that saving for retirement is important but that you will start saving 110 Euros per month starting next year and not now. Since it is easy to make good decisions that will take place sometime the future, a smart thing to do is to have a binding contract. For example you can sign a contract now to start saving money starting next year… and in such a way that you can’t break the contract when “next year” comes. A very nice case study on this is “Save More Tomorrow” that I will present later.

Going to the hypotheticality dimension of psychological distance, it plays a big role in dishonest behavior. Dan Ariely reports in his book “The honest truth about dishonesty” that cheating to get more “chips” that can be transformed into money was bigger than cheating to get money directly. Now you know why in casinos the gambling is done with chips and not with real money.

From an objective point of view, a chip is the same thing with money. From a subjective point of view, a chip is not actually money, it is hypothetical money. It is one step away from money.
I guess that bank cards have a similar role. It is money but not “real” money. My assumption is that people spend more when using bank cards than when using cash because giving cash feels like spending money, whereas using a bank card does not.

Another implication of the hypotheticality dimension of psychological distance is that it allows ease for doing difficult things. I’ve mentioned in “Despite Working in Very Personal Domains People Talk in a Very ImpersonalManner” that introducing psychological distance, hypotheticality in this case, makes it easier to do things that have a huge psychological load. For example doctors use very impersonal terms when talking about the people they are treating. This allows them to not carry the burden of “cutting up humans”.

Going to the social dimension of psychological distance, one implication is that we tend to view our own problems or issues larger than the ones of others. But this blog is about decision and behavior guiding, not about how to improve one to one relationships.

The in-group vs. out-group (or us vs. them) dimension plays a big role in behavior. We know that people follow or imitate other people’s behavior. At the same time, when there is a clear in-group vs. out-group situation, we are influenced by the behavior of other members of our in-group and we do not copy the behavior of the out-group. In fact it is not unexpected to do exactly the opposite of what the out-group does.

To sum up, psychological distance refers to how close or far we perceive a “thing”. In other words it refers to the level of detail we perceive. There are five dimensions of psychological distance: (1) physical; (2) temporal; (3) likelihood; (4) hypotheticality and (5) social which can be “me” or “someone else” or “Us vs. them”.

The existence (introduction) of psychological distance influences behavior and decisions in both positive and negative ways.

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