21 May 2013

How to See Personality from a Behavioral Economics Perspective

In the 4D Model of Human Behavior Personality is one of the sources of human behavior. Although in popular belief it is seen as the only source of behavior, the reality is that Personality is, out the four sources from the model, the weakest one. Taking this into account, a legitimate question is why is it still included in the model?

To better understand why personality is present in the model, I suggest taking a look at it from a behavioral sciences perspective. If we accept the System 1, System 2 perspective or in other words the bird and computer brains, then we will see that several personality traits are significantly important. Moreover, personality traits are relevant for components of the other three dimensions of the model, Environmental influences, Social influences and Internal state.

In previous posts I have presented the personality traits that I believe to be most important. These are Intelligence, The Big Five Personality Traits, Need for Cognition, Need for Uniqueness, Regulatory Focus, and Life History Strategy adopted. In the following paragraphs I will present most of these traits from the perspective of behavioral sciences.

Let’s take a look at intelligence. A very brief and somehow superficial definition of intelligence is the capacity of processing information. At the same time, intelligence implies accurate processing of information. Moreover, all tests that measure IQ include time pressure. In simpler words, a person who takes an IQ test has very little time to answer each question.

If we take the dual system of reasoning perspective, we see that time pressure implies a dominant reliance on System 1 or the bird brain. This system of reasoning is fast whereas the computer brain (system 2) is slow. From this point of view, it could be inferred that intelligence is strongly related to the accuracy of System 1 (bird brain) reasoning.

Let’s take a look at need forcognition. A very frugal definition of this trait would be how much a person likes to think. A more elaborate definition would be the tendency to engage in effortful thinking. If we take the dual system of reasoning approach, need for cognition can be seen as a measure of usage system 2 or the computer brain.

Things are similar for the Openness to experience trait from the Big Five personality traits. This trait is correlated with need for cognition and it can be briefly defined as intellectual curiosity. Openness to experience is strongly related to the use of the computer brain (system 2).

Let’s take a look at need foruniqueness. This trait could be briefly defined as the degree to which a person expresses her own individuality and at the same time belong to a social group. This trait is strongly related to social competition which is a component of the social influences dimension. In my humble opinion, people with high scores on need for uniqueness are more likely to be more competitive and engage in fierce social competition.

Conscientiousness, which is one of the Big Five personality traits, can be briefly defined as ability to work hard and thoroughly. This trait is strongly related to self-control, which in turn is very important for the internal state dimension. I believe that conscientiousness score of a person would predict well the influence of visceral influences on the person’s behavior.

Life History Strategy adopted is a trait that comes from evolutionary psychology and indicates how much a person is inclined to invest in her own development and improvement and how much is she inclined to “advertise” herself on the social market. This trait is highly significant for social competition, a component of social influences. People who are more on the side of the Fast Life History Strategy are more likely to be more competitive on the social market and allocate more resources for achieving a higher social status. People who are more on the side of the Slow Life History strategy will devote more resources to investing in themselves and less on communicating their value on the social market.   

Regulatory focus is a trait that reflects which goals are more important for a person. People who are more on the prevention focus side tend to have very salient goals of avoiding losses. People who are more on the promotion focus side tend to have very salient goals of achieving gains. This trait is strongly related to the concepts of loss and risk aversions from prospect theory. People with a dominant prevention focus, compared with people with promotion focus, exhibit higher levels of both loss and risk aversions.

Personality is a valid predictor of behavior and I believe that seeing it from this perspective gives more opportunities to understanding its role.  

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