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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Emotional Intelligence … is it or is it not?

As I mentioned in the previous post on Intelligence, in recent years there has been an inflation of types of Intelligence and the one that got the most popular is Emotional Intelligence.

In opposition with General Intelligence (or simply intelligence), the amount of research in the area of Emotional intelligence is not impressively extensive. I’ll come back to this in a couple of paragraphs.

The interesting thing about Emotional Intelligence is that it sounds good. Now, really just say “Emotional Intelligence”. It sounds really good because everything that is emotional has this kind of aura of “coolness” (especially among marketers). Moreover it sounds like some sort of new form of intelligence that is not reserved only to smart people. It sounds more democratic.

These characteristics of Emotional intelligence lead to the fast propagation of the concept in both (pseudo) science and popular culture. What usually happens when a concept becomes very popular very fast is that along the way it becomes very unclear, but no-one acknowledges it.

Let’s put things a bit differently, What is Emotional Intelligence? What does it mean to be Emotionally Intelligent? Probably most answers to these questions go like this “to be emotionally smart” or “to be good with emotions”… in essence the answer is a tautology (which means that we define a bird as being a bird).

If we go back to the simplistic definition of intelligence that I gave in the post about it, namely “Capacity of processing information” and acknowledge that emotions can to a certain extent be considered as information, then we have a rough definition of Emotional intelligence. This rough definition would be the “capacity of processing information in the form of emotions”.

A formal definition is: “Emotional intelligence is a set of abilities that includes the abilities to perceive emotions in the self and in others, use emotions to facilitate performance, understand emotions and emotional knowledge, and regulate emotions in the self and in others (Mayer and Salovey, 1997)” as cited by Côté, S., & Miners, C. T. H. (2006).

Going a bit sideways, I would like to address the issue of why emotions can be considered information. Experiencing emotions is deeply rooted in our evolutionary past. Even other species have emotions and act on them. To put things simply, emotions are the primitive response to outside stimuli. We feel fear only in the presence of a threat; we feel disgust in the presence of something potentially harmful etc. So emotions are some sort of information on things around us.

At the same time, expressing emotions is a form of communication. Pioneering research done by Paul Ekman has proven that emotions are universal and so is expressing them through facial expressions. This means that before language developed, our distant ancestors communicated with each-other through expressing emotions.

As we know, the subject of communication is essentially information, thus emotions can be considered as information.

Returning to emotional intelligence and its rudimentary definition of “capacity of processing information in the form of emotions”, we have to see if such a thing actually exists. Let me put things a bit differently. Intelligence in its “conventional” definition refers to processing information in the following forms: verbal (words and expressions), quantitative (numbers and mathematical expressions) and visual-spatial. In order for emotional intelligence to actually exist it has to be distinct from “conventional” intelligence. This means that the ability to process information in the form of emotions has to be distinct from the ability of processing information in the form of words, numbers and visual-spatial.

If the above mentioned abilities are not distinct, then Emotional Intelligence is only another fancy name for the same old thing.

As far as I know, emotional intelligence is somehow distinct from “conventional” intelligence. In a very nice study by Côté & Miners from 2006 the relationship between “conventional” intelligence (IQ), emotional intelligence (EQ) and job performance was investigated. Their conclusion was that for people with a relatively low IQ, EQ had a positive influence on job performance. However, for people with a relatively high IQ, EQ had no influence on job performance.

As I see it, Emotional Intelligence partly overlaps with “conventional” intelligence. In the end intelligence is about processing information and if some people can process better information in the form of emotions and others in the form of numbers that is simply it.

What I find interesting is that people with high IQ get the same results regardless of their EQ. This can be because IQ compensates for EQ.

Before ending, I would like to make two final remarks. First, I believe that the ability to process emotions can be educated to a large extent. For people who are not good at processing information in the form of emotions it can be useful to learn (cognitively) what emotions are and how each of them is expressed.

Second, beware of the noise about Emotional intelligence. As I mentioned earlier, there has been a lot of “buzz” around emotional intelligence and to la large extent the actual meaning of the concept has been severely diluted. One particular aspect that I consider to be critical about emotional intelligence is how we measure it. Because emotional intelligence is an ability or capacity of processing emotions any form of measurement should test that ability through tasks.

A conventional IQ test asks people to give the right answer to a problem. However, some (so called) EQ tests consist of self-reported information or in other words answering questions such as “are you a good negotiator?”. Self-reported data is useful for assessing personality traits, but by far it has nothing to do with assessing abilities.

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Note: this post is documented from:

Côté, S., & Miners, C. T. H. (2006). Emotional intelligence, cognitive intelligence, and job performance. Administrative Science Quarterly, 51, 1-28.

What is SMART? Intelligence and its Role in Behavior

It is time now to address the topic of Intelligence and its role in behavior. In the 4D Model of Behavior I have included Intelligence in the Personality dimension since it is a stable personal trait.

As you will read in the following paragraphs, Intelligence is very likely the most important personal trait in humans. But before assessing the role intelligence plays in human behavior, we should first try to define intelligence.

Apparently it is quite easy to define Intelligence because whenever it comes into conversation somehow everybody understands what it is. I said apparently… in fact it is not so easy to give a comprehensive definition of this wonderful human trait. The best I could do in providing a simple clear definition is that intelligence is mental capacity of processing information.

For many years the popular culture has held different understandings of what “being smart” or in more scientific terms intelligence is. Not very long ago intelligence was confused with memory. People who were able to memorize large quantities of information were considered to be smart. But, as you may know already, this is false in the sense that intelligence is about processing information and not simply storing it in the brain.

Another source of controversy and un-clarity in what Intelligence is comes from the fact that (especially in the last 10-20 years) there was an inflation of types of intelligence. The most widely spread is Emotional Intelligence, but by far is not the only one. Without saying that all these types of intelligence are artifacts to sell books and publish scientific articles, I would say that we should not ignore intelligence as a general trait.

I assume that another source of the inflation of types of intelligence is the natural desire of each individual to be smart or intelligent. To put this a bit differently, each individual wants to be able to say that “I’m not very high on IQ (intelligence), but I am high on that type of Intelligence (let’s say emotional)”.

I have news for all of human kind! With a probability of about 70% you are average… ok… I’ll make a concession. If you are reading this, there is a good chance that you are above average intelligence, but not too far from the average.

Coming back to the simple definition of Intelligence – metal capacity to process information – we have to acknowledge that because there are different types of information there are multiple sides of intelligence. Let’s make this a bit clearer. In school people are taught two types of information – verbal and quantitative (numbers). This means that intelligence comprises of processing verbal information and well as numeric – quantitative information. By numeric I mean numbers, abstract expressions and formulas. At the same time, people have not evolved in a library or in a math classroom. A lot of information we have to deal with is visual and spatial, implying that intelligence includes processing of visual-spatial information.

Now that we’ve managed to get a general idea of what intelligence is, let’s go back to the fact that intelligence is a personal trait. This means that everyone has it and at the same time there are individual differences in how much of it each individual has of it. This takes us to the field of psychometric measures or in other words IQ tests. There are several IQ testing methodologies and I don’t want to go into detail on them. What you should take into account is that all these tests measure the extent to which a person is able to process information.

As a funny note, if you want to get a higher IQ score, the best thing you can do is to take the test again …

At the beginning of this post I have mentioned that Intelligence is very likely the most important personal trait of humans. Starting from the beginning of the XX-th century intelligence has been extensively studied and there are some irrefutable conclusions that have been drawn.

First, IQ is the single best predictor of job performance. Simply put it, smarter people perform better at their job. Moreover, the more complex the task is, the higher the predictive value of IQ is in task performance. In other words, IQ predicts better job performance for complex tasks that it predicts it for simple tasks.

Second, IQ is a very powerful predictor of academic performance. This is not really surprising since in school people have to process large amounts of information. By the way, in case you have (or had) to take a standardized test to get into a higher education program, be sure that the test includes a large component of IQ testing.

Third, IQ is a good predictor of life quality. To put this simply, smarter people live better lives. This is due to a higher income (the higher the IQ, the higher the income), higher attractiveness for long term relationships, lower likelihood of committing crimes (or at least getting caught) etc.   

A fun fact about intelligence is that it is positively correlated with semen quality (in men of course).

To summarize this, overall the more intelligent the better. Of course, extremely high levels of IQ can be detrimental, but this is another story.

After learning (or being reminded of) the benefits of a higher IQ, one might want to increase his or her IQ score. In order to see if it is possible to increase someone’s intelligence we should take a look at where intelligence comes from.

Like most personal traits, intelligence is highly heritable. Now, the interesting thing about IQ is that it is more heritable than any other personal trait. Different studies found that IQ is heritable through genes from 40% to 80%. To put this differently, up to 80% of your IQ comes directly from your parents’ IQs.

Environmental factors contribute to IQ, but to a very small degree. Moreover, after childhood and adolescence the environmental factors have virtually zero influence on a person’s IQ.

Quite disappointing news if you thought that you can increase your or your children’s IQ. Well, yes and no at the same time. The evidence that IQ is highly heritable is unquestionable and we simply have to acknowledge it. At the same time, my view is that what we inherit from our parents is some sort of “maximum level of IQ”. This means that to a small extent one’s IQ can be improved through nurture and practice (doing mentally challenging things).

Let me give a numeric example. Let’s say that someone was born with an inherited IQ potential of 125. This does not mean that that person will necessarily reach 125 points on an IQ test regardless of what happens in his or her life. If that someone’s brain is not nurtured and stimulated he or she will probably score about 105 on a test. This means that the remaining 20 points of potential have to be gained through nurturing the brain.

Before ending this post, I would like to address one final issue, namely: Street vs. Academic smart. In general smart is associated with high academic performance followed by high job performance and life success. At least this is the stereotype of a “smart person”.

Academic achievement is caused by high intelligence (plus a lot of work), but high intelligence does not always ends up in the prototype of a smart person.

As I mentioned in the beginning of this post, intelligence can be simply defined as the mental capacity of processing information. Translating this into computer language it is the “speed of the processor”. What kind of information is fed into that processing is another topic.

Most people that are acknowledged to be smart (high intelligence) end up in more intellectual intensive fields. This doesn’t mean that highly intelligent people are not in other areas of society and they simply have never been educated to process mathematical equations or complex language structures.

Some people simply end up being “street smart” because despite their processing capabilities they process very different information than people with high academic training do.

Intelligence is, in my view, one of the most wonderful things of human kind. Even if we can do very little to increase our or other’s intelligence, we can do a lot in being smart at what kind of information we process.   

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Note: this post is documented from:

Côté, S., & Miners, C. T. H. (2006). Emotional intelligence, cognitive intelligence, and job performance. Administrative Science Quarterly, 51, 1-28.

Miller, G. F. (2009). Spent: Sex, Evolution, and Consumer Behavior. (chapter 11) New York, NY: Viking.

http://en.wikipedia.org/wiki/G_factor_(psychometrics)

Self-enforced poverty – an Evolutionary Approach Based on Life History Theory

Why poor people buy expensive useless status products? Read and find out…

As most of you know already, I have a very strong interest in evolutionary psychology and I believe that taking the evolutionary approach helps a lot in explaining and understanding human behavior.

One of the theories I believe to be highly significant and useful in evolutionary psychology is “Life history theory”. This theory explains many apparent paradoxes that we encounter in our social life and gives very nice insights into understanding human behavior. Let me present this theory as briefly and comprehensively as possible.

As I mentioned in earlier posts, any organism, including humans, has two evolutionary “Macro-Goals” namely survival and successful reproduction. What is usually known in popular culture as the “principle” of evolution is “Survival of the Fittest” (sometimes mistaken for survival of the strongest).

Indeed, survival is crucial and all creatures have some sort of survival driven instincts such as “self-preservation”. If we look a little deeper in the evolutionary process, however, we will see that survival is in itself irrelevant. If we agree that evolution is a slow process of selecting genes from one generation to another, mere survival is by far not enough. If an organism survives for a long time but does not send its genes into the next generation through reproduction, eventually its genetic material will be removed from evolution.

To summarize this, mere survival is not enough for the success of an organism in the evolutionary process. An organism has to reproduce in order to be part of the long and slow evolutionary process.

At first glance, survival and reproduction are goals that go “hand in hand”. However, this is not exactly so since during its life an organism has limited resources. Putting things a bit differently, to a large extent survival and reproduction are competing for the limited resources available to an organism.

Life History Theory (introduced by McArthur & Wilson, 1967 and developed in 1975) is derived from general evolutionary theory and describes the allocation of an individual’s material and metabolically resources between short term and long term survival and reproduction. The tradeoff an organism has to deal with is whether to invest in Somatic Effort - growth and maintenance of the body and in the case of humans the mind (knowledge, skills) and Reproductive Effort – attracting a mate, deferring same sex rivals, reproduction and investment in offspring. Moreover, Reproductive Effort consists of two types of investments: Mating Effort – resources needed for attracting, retaining sexual partners and deferring same sex rivals and Parental Effort – resources needed for the increase of the offspring’s chances of survival and successful reproduction.

Again taking the evolutionary perspective, the difference between reproductive and somatic effort is, in fact, a difference between “reproduction now” and “reproduction later”, since somatic effort, even if it leads to higher survival rate or longer life span, has no evolutionary benefit in itself.

Keeping in mind that there is a tradeoff between reproduction and somatic effort (survival), organisms vary on how much of their limited resources are allocated to one or another. Organisms that allocate a lot of effort to reproduction at the expense of somatic effort are considered to follow a “Fast” Life History Strategy. Organisms that allocate a lot of effort to somatic investment at the expense of reproduction are considered to follow a “Slow” Life History Strategy.

To better understand this, consider the following example. Cats tend to have a large number of offspring (between 3 and 6 depending on the age of the mother) twice a year and each generation of cubs receives about 2 months of parental investment from the female and virtually no investment from the male. Cats develop sexually rapidly (a female can have cubs at the age of 10 – 12 months), have relatively short lives, exhibit high infant mortality, are generally of small size, and show very little group cohesion. Cats are a very good example of “Fast” Life History Strategy.

At the other end of the spectrum are, for example, elephants which have a small number of offspring (one or two), have a large gestation period of two years, exhibit slow sexual development, have a low level of infant mortality, live longer, are, in general, of large size and show high group cohesion. Elephants are a very good example of “Slow” Life History Strategy.

Humans as specie have a “slow” life history strategy. This is due to the large amount of time and resources needed for a person to reach reproductive age.

However, there is a lot of variation within our species, some people tend to have more children, to have the first child at a younger age and offer less parental investment, while others tend to have fewer children, have the first child at an older age and offer higher parental investment. A very salient example of this within specie variation is the comparison between India and Europe.

A legitimate question regarding this variance is “what causes it?” The fundaments of Life history theory suggest that life history strategy is an evolutionary adaptation to the environment; thus both the between and within species variation can be explained by differences in environments that different individuals have developed and currently live in.

The two broad types of Life History strategies are evolutionary adaptations to the environment in which a species has evolved. Species that have a “fast” life history strategy evolved under unstable and unpredictable conditions. These conditions lead to a strategy focusing on having more offspring (offspring quantity). For example in an environment which has numerous threats which lead to a high mortality rate within a population the normal adaptation would be to adopt a faster life history strategy because somatic investment will not have evolutionary pay-offs since an organism would die before getting to reproduce.

Species that have a “slow” life history strategy evolved under stable and predictable conditions, which lead to a strategy focusing on the survival of offspring (offspring quality).

In humans, variation in the type of life history strategies adopted can be attributed to both environmental factors such as high infantile mortality, short life expectancy due to poor living conditions etc. and to genetic inherited traits.

As I mentioned earlier, the difference between “fast” and “slow” life history strategy resides in the allocation of resources between reproductive effort and somatic effort (survival). There are also differences in how reproductive effort is distributed between its two (sub)components which are mating effort (acquiring mating partners) and parental effort (investing in the children).

In the case of a “slow” life history strategy, there is a larger parental effort and a smaller mating effort. On the other hand, in a “fast” life history there is an emphasis on mating effort and a relative neglect on parental effort.

Life history strategy is a complex trait and, as far as I know, there is no unique scale or took to measure it to its full complexity. There are, however, three proxies that work quite well.

First there is parental investment received by a person. This parental investment consists of maternal and paternal investment to which it can be added “nepotistic” investment which is the investment received by a person from family members other than the parents. People who have received a low level of parental investment (during childhood) tend to adopt a “fast” life history strategy, whereas people who have received a large level of parental investment tend to adopt a “slow” life history strategy.

Second there is childhood socio-economic status. In essence it measures to what extent a person grew up in a relatively rich or poor family. People who have grown up in relatively poor conditions tend to adopt a “fast” life history strategy, whereas people who grown up in relatively rich conditions tend to adopt a “slow” life history strategy.

Third, there is Socio-Sexual Orientation. This measures the extent to which a person has long or short term mating goals. In other words if a person is more inclined to have short term romantic relationships or long term ones. Socio-Sexual orientation should not be mistaken for “sex drive”. It does not take into account the number of sexual intercourse instances; rather it looks at the number of sexual partners a person has. People with a more restricted socio-sexual orientation (fewer partners and more serious relationships) tend to adopt a “slow” life history strategy, whereas people with a more unrestricted socio-sexual orientation tend to adopt a “fast” life history strategy.

When it comes to Socio-Sexual Orientation there is a significant gender difference, namely that on average men are more unrestricted than women. However, this is not to say that men are unrestricted and women are restricted because there is very large within gender variation. Putting it a bit differently, there are women who are more unrestricted than the average of men and there are men more restricted than the average of women.

Which one of these proxies is better to measure one’s type of life history strategy I can’t say. What I can say is that all of them capture a significant part of the complex trait Life History Strategy, but none captures the entire trait. Also, from my own experience with research in this area there are some correlations between the proxies, but none of them is very high, meaning that each of them captures some related but distinct aspects of life history strategy.

To summarize, life history strategy captures the tradeoff between allocating resources for somatic investment and reproductive effort. People with a “fast” life history strategy allocate more resources to reproductive effort than to somatic investment. People with a “slow” life history strategy allocate more resources to somatic investment than to reproductive effort.

When it comes to reproductive effort, people with a “fast” life history strategy allocate more resources to mating effort (getting mating partners) and less to parental investment. People with a “slow” life history strategy allocate more resources to parental investment and less to mating effort (getting mating partners).

As I mentioned in the beginning of this post, I believe that Life History Theory has many significant implications in practice and it helps explain some apparent paradoxes in social life. Let me explain a bit more.

As you may know, I am Romanian and Romania is not a very rich country. Despite (or in fact because of) this the number of status brand automobiles (such as BMW, Mercedes, Bentley etc.) per capita is significantly larger than in more richer countries in the West of Europe such as The Netherlands (where I life now), France, Germany etc.

Another interesting fact about my home-country is that in 2009 when the country was hit by a severe recession (-7% of GDP) the sales for Ferrari cars actually increased compared to 2008 when the economy was doing well.

These facts are more or less the same for all emerging economies in the East of Europe and Africa, South-East Asia etc. At least from my experience when crossing the former “iron curtain” (the border between western democratic countries in Europe and Eastern former communist countries) there is a clear difference in the type of cars that are seen on the roads. In the west there are significantly fewer expensive status cars, whereas in the east their proportion is huge.

Of course, there are more causes for this difference, but one of them is related to Life History Theory. In more poor and uncertain environments many people are more on the side of a “fast” life history strategy and it is only natural for them to invest more in “mating effort” which includes enhancing one’s status through conspicuous consumption.

I have heard a sad but interesting story about a very poor family who somehow got to be presented on TV before a major Christian holyday. In brief, they were so poor that they couldn’t get a decent meal for that holyday. After the story being presented on TV, a rich man gave that family about 800 Euros (which is a lot of money) to have a decent celebration of the holyday. What that family did with the money… well they bought an iPhone…

Apparently this type of behavior is really stupid and I don’t argue with that. However, this behavior is natural. Simply people with a “fast” life history strategy invest a lot of their often few resources in their status. Unfortunately, buying iPhones or BMWs does not get someone out of poverty.

Another difference between “fast” and “slow” life history strategy is the attitude towards risk. In general all people are risk averse, but again there is variance within our specie on how risk averse or risk seeking we are. People with a more “fast” life history strategy are more willing to take risks especially when they feel a potential threat to their life or well-being (in other words, environmental threats such as recessions, wars, natural disasters etc.). On the other hand, people with a more “slow” life history strategy are more risk averse and avoid taking risks even when there are environmental threats.

This difference in attitude towards risk explains why the people with very limited possibilities are the ones that gamble their last pennies and are likely to get loans with very risky costs.

Before continuing with the argument, I have to say that having a “fast” life history strategy is not wrong neither is having a “slow” life history strategy. Each of them is an adaptation to the environment. Even if some consider that having a “fast” life history strategy is wrong, people who are more “fast” than “slow” in life history strategy are not to be blamed for their behavior. They do what is natural for them to do.

In my opinion the “fast” life history strategy contributes to what I call “Self-enforcing poverty”. If people in very poor societies have many children, then the next generation will be at best as poor as their parents were.

Even if there is an influx of money in societies dominated by “fast” life history strategy, this money will be spent on increasing status which can lead to a runaway conspicuous consumption race. Unfortunately status products will not make people less poor, nor will they give them more opportunities for future development.

In fighting poverty, one crucial aspect is to understand which the sources are of a “fast” or “slow” life history strategy. To a certain extent, life history strategy is inherited through genes, thus very little can be done in this area. At the same time, there is a component inherited through nurture and there things can be improved. Moreover, in stable predictable environments the differences between “fast” and “slow” life history strategies are very small, but things change when the environment is unpredictable and offers cues of life threats such as high infantile mortality, high incidence of diseases, wars etc.

Environments can be changed… and controlled.

Check out my webinar on Aug. 27. 

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Note: This post is documented from:

Griskevicius, V., Tybur, J.M., Delton, A.W., Robertson, T. E. (2011). The Influence of Mortality and Socioeconomic Status on Risk and Delayed Rewards: A Life History Theory Approach. Journal of Personality and Social Psychology, 100(6), 1015–1026.

Figueredo, A. J., Vasquez, G., Brumbach, B. H., Sefcek, J. A., Kirsner, B. R., Jacobs, J. W. (2005). The K-factor: Individual differences in life history strategy. Personality and Individual Differences, 39(8), 1349–1360.

Figueredo, A. J., Vasquez, G., Brumbach, B. H, Schneider, S.M. R. (2010). The heritability of life history strategy: The k‐factor, covitality, and personality. Biodemography and Social Biology, 51(3-4), 121-143.

Simpson, J.A., & Gangestad, S. W. (1992). Sociosexuality and Romantic Partner Choice. Journal of Personality, 60(1), 31–51.

The Shortcomings of Marketing Based on “Who the Customer Is” and the Alternative

In recent posts on my blog I have described and discussed several personality traits and I will continue to do so in the near future. I guess, now it is time to discuss several shortcomings of relying on personality, especially from the perspective of marketing research and marketing execution (designing and implementing marketing actions).

I have to make a note: In this post I use the word “personality” with a broader meaning which includes everything that is intrinsically related to the individual and relatively stable. This includes aspects such as gender, age, beliefs etc.  

Let’s start with the deeply rooted belief that behavior is the outcome of personality only. This is called in scientific terms the fundamental misattribution effect and I have discussed it in “Are you a jerk?”. 

The established philosophy (in the sense of way of thinking) in marketing is that a company/ brand should get to know its target audience as good as possible. Then the company / brand should adapt itself and its products and services to “who the consumer is”. The better a company knows its target audience and the better it responds to its public’s needs is directly and causally linked to the success of the company.

In other words, getting to know “who the consumer is” means getting to know the personality of the consumer. (I use personality in the broad sense described at the beginning).  

Honestly, this is not wrong. In fact it is very good. It is hard (or virtually impossible in a free market) for a firm to make profits by selling things that the public does not want or that inadequately fit for the target audience’s needs. Take for example a shoe making company. It is virtually impossible to sell shoes that do not fit the feet of the people in the target audience. If this company wants to sell to basketball and rugby players it should better have “extreme” measures for the shoes it sells. Similarly if this company wants to sell men shoes in The Netherlands it should have shoes size 46-47 (European measures) or it will lose a significant part of the market. For the readers of this blog who are not familiar with men shoe sizes in Europe, usually measures larger than 45 are very rare in most European countries. However, the Dutch are the largest men and women in the world (on average).

The established philosophy in Marketing is to get to know “who your consumer is” and what are his or her values, attitudes and preferences. The first “line” of information that a marketer wants to get (or simply gets) from consumer research is demographic data. The second “line” is represented by psychographic data which, in a nutshell, measures the beliefs, values and attitudes of the target audience.

A consumer description goes something like this: “your target audience is 70% female and 30% male; they are aged between 40 and 55 years old; the average gross income per household is X0.000 Euros; they live mainly in urban areas; they have moderately conservative beliefs and values and they have above average scores on price conscientiousness.”

To make a long story short, the marketer gets a description of the “average consumer’s personality”. Or who the average consumer is.

The marketer who receives this information has the job (responsibility) to adapt the product or service, the distribution, the pricing and the marketing communication to the profile of the consumer. More or less, a marketer’s career is centered on these (meta) tasks.

Since I have entitled this post “shortcomings of personality” there are several questions that should be answered. Let’s take them one by one.

First, Is this information completely irrelevant? Of course not! Not knowing who you are targeting is the first step in “screwing it up”. The basics learned in “foundations of marketing” are not obsolete and most likely they will never be.  

Second, Is it wrong trying to adapt products, services, pricing, distribution and marketing communication to who the consumer is? Is it Useless? Of course not! Again, these are the basics of marketing. It’s impossible to sell your product if it is not sold in the shops where your “average consumer” goes shopping. You get the main idea, right?

Third, is it wrong to go beyond demographic information and into things like values, beliefs, way of life etc.? Again, the answer is NO. In largely globalized markets and with a population more diverse than ever, it is hard to rely only on demographic information. Without trying to be dramatic, the reality is that in the entire history the population has never been larger and neither has it ever been more diverse than it is now. This means that “who your consumer is” is significantly more complex than it used to be 100 years ago.

The legitimate question is now “if none of this is wrong, then what is the problem? Why do you say there are shortcomings”.  The answer is that IT IS NOT WORNG to get information on who the target audience is (personality), but IT IS SEVERELY INCOMPLETE. Let’s take a look at why is it so.

First, some of the assumptions on which “learning who the consumer is” is based are flawed. For example a lot of psychometric research focuses on preferences and the assumption is that preferences are stable. At the same time we know that it is not so. Some preferences are stable; other can change depending on context or on the mere choice set. Similarly for attitudes, the assumption is that they are strongly linked to personality, but it is not fully so. Attitudes can be influenced to various degrees.

Second, most of the “traits” that compose the profile of “who the consumer is” are assumed to be valid predictors of behavior (in the case of marketing, buying behavior). In fact these “traits” are predictors of behavior, after all people in market research are not idiots. However, things such as personality traits and attitudes are valid, but week predictors of behavior.

Third, Personality is not the only source of behavior; in fact it is the weakest source of behavior. To put this differently, who a person is influences that person’s behavior, but only to a reduced extent. Personality is not equal to behavior and behavior is not equal to personality. In the same line of thought, attitudes influence behavior, but attitudes are not the same thing as behavior and behavior is not the same thing as attitude.  

Fourth, a big problem with assessing personality, especially psychological aspects of personality is that all these traits follow the rule of “a normal distribution”. We know that people who score High on conscientiousness do this and that, while people who score low on this trait do exactly the opposite. It’s all very nice, but these conclusions are drawn from many studies that use statistical analysis to identify the slightest differences. In practice the above mentioned information is still relevant, but quite hard to use because most marketers don’t go to the extremes of a normal distribution.

Let me clarify the issue of a Normal distribution. Take a look at the picture below:

Source of the picture 

As you can see about 70% (68 to be more exact) of a population is more or less in the middle intervals of a normal distribution. For any personality trait (including IQ) it means that 70% of people (in a general population) score very close to the mean. In other words, 70% of people are neither high, nor low on a personality trait. Being slightly to the left or slightly to the right means that a person will sometimes (quite rare) do what people “low” or “high” on that trait do. For example if someone is a bit above average in need for uniqueness it means that that person will seldom buy personalized products, but more often than not they will not do so.

Looking at the same picture we see that “extremes” are composed out of only about 8% of the population (4% very low and 4% very high). Is this a viable target audience? Could be, but more likely it isn’t.

I guess you got the idea. Information on “who the consumer is” is not irrelevant. But quite often has a low level of usefulness in practice and a relatively low predictive value, especially in the case of non-niche products. And by niche I mean really narrow audience.  

Fifth, by focusing (mainly) on personality (who the consumer is), marketers limit their possibilities for action. An inherent characteristic of personality is that it is (roughly) stable. In other words, nobody can change the personality of another person. Focusing (mainly) on personality implies that the only changes that can be made are on the side of the company / brand. With the risk of repeating, adapting a product, offer etc. to the customers’ needs is good. However, there are more things that can be done.

A marketer’s job is to create behavioral change on the part of consumers. To put this differently, a marketer’s job is to influence the behavior of consumers. Some examples of behavioral change are: to buy more, to use more, to choose one product over another etc.

The most common approach in creating behavioral change is to adapt the firm’s offerings to the personality of the consumer. We know, however, that personality is not the only source of behavior and that it only offers a base-line for behavior. This means that trying to adapt one’s offering to the base-line of behavior will not do everything that can be done in creating behavioral change.

My belief is that using the other three sources of human behavior – Environment, Internal state and Social influences – will give considerably better results in creating behavioral change. This use of the other three dimensions of the 4D Model of Behavior can be two folded.

First, when doing market research marketers can take into account all four factors, not only personality. Understanding the influences that the other three sources have on behavior will lead to more opportunities for adapting brands and offerings not only to “who the consumer is” but also to the “context” of behavior.

Second, although personality can’t be changed, the other three dimensions can be controlled (or to be more honest manipulated). By controlling elements of the other three dimensions from the 4D Model of behavior, marketers will be more effective in creating behavioral change.

To conclude this post, focusing on “who the consumer is” is in no way wrong. However, it is dramatically incomplete. By extending the focus to other three sources of human behavior – Environment, Internal state and Social influences – new opportunities open for both better adaptation of the offer and creating behavioral change.

Don’t ignore personality! Look beyond it!

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You Need to Be Distinctive and to Belong - Need for Uniqueness

Every person has two apparently contradictory needs: (1) to fit in a social group and (2) to be distinctive and special. These needs are, in my view, deeply rooted in our evolutionary past. First, we need to be part of a social group, the evolutionary explanation being that as part of a group we have more chances of fulfilling the evolutionary macro-goals of survival and successful reproduction. I have addressed this issue in Doing What Others Do – SocialInfluences of Peers. 

Second, we need to be distinctive because we have to compete with others for limited resources and for social relationships such as attracting friends and potential mates. I have addressed this issue in Keep Up With the Others - Social Competition.  

The evolutionary explanation for these needs is not the only one. It is possible that we have these needs simply because we need to feel comfortable with ourselves. I personally prefer the evolutionary explanation.

As mentioned in the beginning the need to fit in a social group and the need to be distinctive are apparently in conflict one with another. Despite this, these two needs are not antagonistic, meaning that a compromise can be reached. The compromise result is that people have a need to feel themselves as moderately distinctive. Both extreme similarity and extreme dissimilarity to others are unpleasant and discomforting. Moreover, people who see themselves as moderately distinct from others experience general positive affect (good mood).

When we are made aware that we are similar to others, we tend to reaffirm our distinctiveness by conforming less, expressing less popular attitudes and placing more value on scarce experiences and messages.

In formal terms the need to be (feel) distinctive is called “need for uniqueness” and is a personality trait. Everybody has this need for uniqueness; however there are individual differences in the degree to which people feel this need. Psychology literature has identified two scales to measure need for uniqueness. In brief, the first scale developed was the Need For Uniqueness scale (NU). This scale focused mainly on manifestations of (somehow) risky public behavior. Since this measure was suboptimal, another scale was developed, namely the Self-attributed need for uniqueness (SANU).

For marketing the NU is relevant because it predicts consumers’ selection of observable products. The SANU is better at predicting the desire for scarce products, customized products and pursuing uniqueness through consumption.

Distinctiveness can be expressed through many means. Next the most relevant ways of “showing” uniqueness are presented.

First, people can express distinctiveness and at the same time satisfy the need of belonging to a social group by being (or identifying themselves as) part of a small somehow exclusive social group. I call this the “better minority” effect. In essence an individual likes to belong to a special small social group that s(he) perceives as being better than the majority or general population. The smaller the “better minority” the more its members identify themselves with the group and satisfy their need for uniqueness. Moreover, when people are made aware of their lack of distinctiveness they tend to identify themselves with “better minority” groups.

Second, people can express distinctiveness through consumption. For instance, people can show uniqueness by buying and possessing scarce products. In fact people with high scores on need for uniqueness (measured using the SANU scale) as compared with people with low scores on need for uniqueness tend to prefer more scarce (rare) products such as “limited edition” over common ones.   

Another way in which people can express distinctiveness through consumption is by favoring highly innovative products before others do. In other words, people who are high on need for uniqueness tend to adopt new and innovative products earlier than people with low need for uniqueness. To put things a bit differently, the early adopters of highly innovative products are people who have a high need to feel and show that they are different from the large majority.   

Remaining in the area of consumption, people can express distinctiveness through customization (personalization) of products. People who score high on need for uniqueness (measured using the SANU scale) show a higher preference for personalized and customized products than people who have low scores. To put things a bit differently, the entire industry of customizing mobile phones, clothes, cars etc. is driven by Need for uniqueness.

Another mean of showing uniqueness through consumption is the preference for less popular products. People with high levels of need for uniqueness prefer less popular brands, colors and products over their more popular alternatives. However, this effect is valid only for items that are visible suggesting that the preference for less popular products is used to show “public uniqueness” and not “private uniqueness”.  

I have devoted much attention to expressing uniqueness through consumption, but this does not mean that each and every person expresses uniqueness through these means. In fact many people express their distinctiveness through experiences. Let’s imagine a beer chat between two couples. One couple describes in detail the new mobile phone they bought and show them extensively. This couple expresses distinctiveness through consumption.  The other couple tells a story about their latest holiday in an exotic destination where they did scuba diving. This couple expresses distinctiveness through experiences.

For the ones interested more in expressing uniqueness through consumption, I recommend checking out the following two measures: “Desire for unique consumer products (DUCP)” and “Consumer need for uniqueness”.  They are considered to be more useful in applied marketing research that the general measures of need for uniqueness.

Before ending this post, I would like to remind you that each and every person has the two needs of feeling distinctive and at the same time belong to a social group. There are, however, personal differences in the extent to which we feel the need of being distinctive and this is called need for uniqueness and it can be measured. This need is “activated” when people are made aware of their lack of distinctiveness. Moreover, the need for uniqueness is manifested more when the information on lack of distinctiveness is consciously detected as opposed to unconscious detection.   

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This post is documented from: Lynn Michael, and Snyder C.R. “Uniqueness seeking” chapter 28 in Handbook of Positive Psychology (source)

How Much Do You Like to Think – Need for Cognition

Need for Cognition is one personality trait that I see relevant for behavioral research and practice. It has been developed in the 1950s by Cohen, Stotland and Wolfe. The current theory on need for cognition used today was developed by Cacioppo and Petty in 1982 and it is a development of the early theory from the 1950s. But enough with history.

Need for cognition represents “the extent to which people engage in and enjoy effortful cognitive activities”. (Source).

Being a personality trait implies that everyone has “need for cognition” and that each person scores differently on this trait. Taking a look at the extremes we will see that people with high need for cognition often engage in effortful thinking enjoying challenging tasks. Moreover, people with high need for cognition do so without any external motivation or incentives. At the other end of the continuum, people with low need for cognition try as much as possible to avoid elaborate thinking and need external motivations and incentives to engage in effortful cognitive endeavors.

To put things a bit differently, people with high need for cognition like intellectual stimulation more than people with low need for cognition. At the same time, people with high (as opposite to low) need for cognition tend to be more critical, in the sense that they may “think twice” about a certain issue.

As you may have noticed, there is a similarity between need for cognition and the dual-system theory of thinking. For more details on dual-system information processing please take a look at this post: A Bird and a Computerin the Brain (Two Systems of Thinking). 

In short, people have two systems of processing information (thinking). The first one is fast, associative, effortless and is based on “rules of thumb” (heuristics). This system is the default way of thinking. The second system is slow, elaborate, computational and is based on (rational) reasoning. The second system can be activated and interacts with the first system.

Taking the dual-system perspective, it could be said that people with high need for cognition as compared with people with low need for cognition tend to use more often system 2 thinking. This is not to say that people with high need for cognition rely only or even mainly on system 2 thinking. For each and every human being system 1 is the default way of thinking and we all use it as the main information processor. People with high need for cognition simply “switch on” system 2 more often than people with low need for cognition.

The fact that people with high need for cognition “switch on” system 2 reasoning does not make them perfectly rational. As I mentioned in the post A Bird and a Computer in the Brain (Two Systems ofThinking), quite often System 2 works on the inputs provided by system 1, which makes sometimes erroneous judgments. To put this a bit differently, system 2 may use a rigorous though process, but use flawed input data, thus even if the process was “rational” the result is “irrational”. In addition, irrational outcomes are more elaborate if system 2 is used more often.

Switching on system 2 more often has both advantages and disadvantages. Even if high need for cognition doesn’t lead to perfect rationality, it is better than low need for cognition in several aspects. The following implications refer to decision making.

First, a high level of need for cognition may lead to the occurrence of false memories. False memories refer to people remembering things that never happened or remembering seeing or hearing things that the individual was never exposed to. The false memories, however, refer only to things that are related to actual memories. For example, people might falsely remember “a chair” if they have been exposed to other related objects such as other pieces of furniture (table). False memories (usually) do not occur with regard to unrelated items such as “pigs” in the furniture case.

Second, people with high need for cognition as opposed to people with low need for cognition are less affected by the halo effect. This is not to say that people with high need for cognition are immune to the halo effect, but rather that they are affected less by it when compared with people who have a low need for cognition.

Third, people with high need for cognition compared with people with low need for cognition are less affected by anchoring effects. Again, this is not to say that people with high need for cognition are immune to anchoring effects, but rather that they are affected less by anchors.

Fourth, need for cognition influences the effect of priming. However, in the case of primes need for cognition can lead to both a diminished and an exaggerated effect of priming. When the priming is subtle, high need for cognition (as opposed to low need for cognition) leads to an exaggerated effect of the prime. This is due to the fact that when engaging in more elaborate thinking the subtle prime has more opportunities to influence the thought process. When the prime is obvious, however, a high level of need for cognition (as opposed to a low level) leads to a diminished effect of priming because people may correct their judgments being aware of the prime.  

Fifth, need for cognition influences the effect of stereotyping. People with high need for cognition are affected less by stereotypes as compared with people with low need for cognition. Again, they are not immune, but rather influenced less than people with low need for cognition.

Need for cognition also plays a role in Persuasion. In brief, people with high need for cognition tend to be influenced more by the quality of the arguments presented and less by cues such as the credibility of the source, the attractiveness of the person trying to persuade, the framing of the message and their own emotions. People with a low need for cognition tend to be persuaded more by the cues aforementioned and in the absence of external motivations they give significantly less importance to the quality of the arguments.

To sum up, need for cognition is a personality trait that refers to the degree of engaging in (and enjoying) effortful thinking. From the dual-system perspective, need for cognition refers to the extent to which system 2 reasoning is used. People with high (vs. low) need for cognition tend to be affected less by (but not immune to) judgment biases. When it comes to persuasion, people with high need for cognition focus more on the quality of the arguments, whereas people with low need for cognition focus more on other cues.

Need for cognition does not refer to intelligence. The main difference between high and low need for cognition is the willingness or disposition to engage in elaborate thinking. People with high need for cognition engage in elaborate thinking without external motivation or incentives, whereas people with low need for cognition do so only in the presence of external motivation.

The relevance of need cognition in practice

For human resources management need for cognition can be used in recruiting for jobs that demand high levels of critical thinking. In this case high levels of need for cognition should be preferred. For jobs that require more creativity and spontaneity, low levels of need for cognition should be preferred. For some small scale “execution” jobs need for cognition is irrelevant.

For marketing, need for cognition is relevant in two ways. First, when it comes to persuasion and marketing communication, marketers should be aware that in the absence of solid arguments people with high need for cognition will not be persuaded. For some product categories this is not really relevant, but for other product categories it can be highly important.

Second, considering that people with high need for cognition are affected less by judgment biases, this may lead to a decreased efficacy of choice architecture.

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If you are interested in using need for cognition here is a link to one scale that measures it http://www.liberalarts.wabash.edu/ncs/

This post is documented from: Petty Richard E., Brinol Pablo, Loersch Chris, McCaslin Michael J. “Need for cognition” Chapter 21 in Handbook of Individual Differences in Social Behavior (source)