Cut Costs with Paper & Ink - Behavioral Intervention Case Study

At company White a decision is made to cut down costs. One area that will be subject to cost cutting is office supplies. The office manager, Mrs. Boer, is not particularly happy with this decision, but agrees to implement it. She identifies two types of expenses that can be cut down, namely ink / toner for the printers and photocopying machines and printing paper.  

Mrs. Boer thinks of ways in which to convince her colleagues to save ink and paper. She considers writing a memo to the entire staff, telling them that in order to avoid difficulties the firm has to decrease the costs. In order to achieve this goal everyone has to make a small effort and do the following:

When printing or photocopying documents people should print in black and white since colored ink is more expensive than black one. They should also save paper by printing on both sides.

Mrs. Boer realizes that there is a good chance that her colleagues will not comply to the new requirements. She goes to the personnel management department and discusses the possibility of applying penalties for not conforming to these instructions. Finally it is agreed that some small penalties can be applied for repeated misbehavior, namely not printing in black and white and printing both sides.

Before sending the memo and making the changes to the internal code of conduct, Mrs. Boer hears about behavioral and decision sciences. She is a bit reluctant, but decides to get the advice of a specialist in these fields. Mrs. Boer contacts a behavioral specialist. She wants to get a second opinion. Naturally she wouldn’t mind if the outside view would match her approach.

The Brief Analysis from the Behavioral Perspective  

The behavioral and decision sciences specialist looks at the problem at hand and considers the following.

First, most of the times when people are printing or photocopying documents they are under time pressure or simply have other things on their minds. Making photocopies or printing is an auxiliary activity and usually it is done on auto-pilot. This implies that there is a good chance that people will simply not consider to push some extra buttons to make the printing be on both sides and in black and white.

Second, although the reason for applying these new rules on printing, namely cutting costs, is perfectly legitimate, it is not necessarily a goal that many people would be happy to strive for, accepting in the process some minor inconveniences in their work activity.

Third, trying to make people more attentive, to pay more attention when printing or making photocopies is not necessarily a good idea because this would take a piece of their brain power. It is without doubt that brain power should be preserved for the tasks that are truly important for their job performance.

The Behavioral Solution

The specialist in behavioral and decision sciences comes up with the following recommendations.

First, the goal of decreasing the consumption of paper and ink (toner) should be framed as a The White Company Going Green endeavor. Many people are more willing to pursue such a goal than they would be willing to join an effort to cut costs.

Second and most important, instead of asking people to be careful with the use of ink or toner and paper, a better solution would be to simply change the default settings of all printers and photocopying machines to print in black and white and to print on both sides. This approach is better suited to the state of mind which people have when printing and making photocopies, namely auto-pilot. Moreover, the burden of changing the setting of a printer or of a copying machine each time she or he makes uses them is eliminated.

Third, a memo will be sent by e-mail announcing the eco-friendly endeavor of saving paper and ink. In the same memo should be announced that if someone actually, really needs to print on one side or in color can still do so, by temporary changing the settings of the printers and copying machines.

The Behavioral Solution is Better

The behavioral solution has the following advantages:

First, the behavioral solution is non-intrusive since it does not add to the mental burden employees have already in a day’s work. This is advantageous because it allows people to use their cognitive resources for the truly relevant tasks a person has to solve each day.  

Second, the behavioral solution achieves the desired results with minimal costs and minimal inconveniences. The costs of applying the behavioral solution are very low. Changing the default settings of printers and photocopying machines can be done by an employee of the company, while writing and sending an electronic memo involve very little effort. Moreover, the inconvenience and discomfort of making new rules, establishing and enforcing penalties are avoided completely.

Third, the behavioral approach reframes the cost cutting endeavor into an environmental one, thus giving people a noble purpose and making the change more acceptable.

Can it be so simple?

The answer is simply: Yes! By making a minor change – resetting the default settings of the machines – can have a huge influence on human behavior. By reframing a very pragmatic goal – cutting costs – into a nobler or at least more socially acceptable one, people are more willing to accept changes and, if it is the case, minor inconveniences. Moreover, the behavioral solution still allows for free-choice, thus who really needs to print in color or on only one side can do so.

Do not apply this solution in companies or departments that actually need to print in color such as graphical design or advertising.  :)

NOTE: This case study is entirely fictional, though many companies and organizations would benefit by applying its propositions.

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The Shortcomings of Using Reciprocity in Marketing

In the past ten years there has been growing interest in using the so called weapons of influence. This term was coined by psychologist Robert Cialdini who has made a good name for himself outside academia amid the publication of his book Influence the Psychology of Persuasion.  In a nutshell, Professor Cialdini states that six major categories of means can influence behavior. These means received the name of weapons of influence and they are: (1) Reciprocity, (2) Commitment and consistency, (3) Social proof, (4) Liking, (5) Authority and (6) Scarcity.

Many pseudo-scientists who were directly interested started preaching that these means are the solution for all marketing related problems. Without denying the validity of the fact that each and every of these so called weapons of influence has an influence on decision making and on behavior, I am a skeptical when it comes to the claim that it is a must to use them in marketing. Most of my skepticism concerns the issue of which, if any, of these tools to use in a given context. Professor Cialdini has gathered a lot of knowledge on the so called weapons of influence and his book is rich in examples of using these techniques of influence, but there are no clear rules of how to apply the knowledge. I assume that the author didn’t intend to create a guide book on this, thus my critique is directed towards those who recommend head on using any or all or simply randomly picking one technique.  

A large dose of skepticism, from my part, surrounds the use of reciprocity in marketing, mainly in commercial marketing. One view is that offering free stuff, including samples and even actual products, to the actual or potential clients should trigger the mechanism of reciprocity, namely that people will buy more of the company’s products. Personally I believe that this view is deeply flawed and my critique three folded.

First, reciprocity by its very nature is a phenomenon that falls under social norms, whereas purchasing is most often a relationship that falls under market norms. You have probably heard about the study conducted by Professor Regan in which people reciprocated to the favor of receiving a coke by buying raffle tickets. This is an example that might lead to an erroneous belief that offering a gift will automatically trigger purchasing. When looking a bit more in detail, we see that the people who received a coke were asked to buy raffle tickets as a favor for the person who sells them and who is the person who offered the drink. In this case the returned favor is the act of buying and it is directed towards the person who sells tickets and not to the organizer of the raffle, in this case a high-school.

This very nature or reciprocity limits the possibilities for using it in commercial marketing. Imagine that a mail-order company sends you a package in which you find their catalog and a so called gift, say a computer mouse. There is a letter in which the company says that they hope you enjoy their gift and invite you to see if there is anything you want in their catalog.

Do you feel any sense of obligation towards the company? Do you feel that you should return the favor?

My guess is that most people don’t feel that reciprocating is appropriate. After all mail-order companies send packages to make people buy their products. It is hard to believe that sending you a computer mouse or any other so called gift is a favor that should be returned.  

What is very possible to happen is that the mere fact of receiving something would make you like more the company or might simply make you feel good. Subsequently it is possible that you would buy something from this company that you would have otherwise wouldn’t. However this is not reciprocity. You are not returning the favor of receiving a so called gift by purchasing something from this company; rather you feel good about receiving the item and subsequently order something. This is an illustration of the mood and affect heuristics influencing behavior and not a case of reciprocity. In a nutshell, if there is a purchase generated by receiving an item, it is not triggered by the reciprocity mechanism of returning a favor, but by the fact that you simply felt good that your received something.

An advocate of using reciprocity in marketing would give the example of charitable organizations that along with the letter that asks people to donate money for a good cause also send a small so called gift. Moreover, the advocate will point out that this works. The counterargument is two folded. First, it is not clear that there is anything different from the example above. People might simply feel good about receiving something, subsequently donating more money. Second and most important, the act of donating money to charities is not necessarily a commercial one. In other words, donating to a good cause is an action that falls under social norms and not market norms.

The second side of the skepticism of using reciprocity in commercial marketing is focused on the act of offering free samples or even free products. The rationale behind the practice of offering free samples is that people would try the product, like it and subsequently buy it. This, however, has nothing to do with reciprocity. Again, reciprocity is the returning of a favor and giving free samples is not a favor. There is no sense of obligation to return a favor because there was no initial favor.

The practice of offering free products has the rationale that people would buy more of the product after they have received the free one. Like in the case of free sample, this has nothing to do with reciprocity because there is no initial favor to return.

Most importantly, the practices of offering free samples or products come with a very large risk, namely the devaluation of the product. To better understand this, let’s go back to market and social norms. People are social creatures and social norms are very important and prevalent in our lives. However, people make a distinction between social and commercial relationships. If you go to a supermarket to buy groceries, there is no social element in the transaction. It is simply money in exchange for groceries. If a product is given for free, then it means that its price is zero. Subsequently any price the seller will ask later is huge. If you offer, say a magazine, for free and subsequently expect someone to pay even fifty cents for it, this will not happen. Something received for free has the price of zero and even if the seller asks only a few cents that amount is huge compared to the initial price of zero.

The third side of my skepticism on using reciprocity in commercial marketing is that it gives the possibility of free riding. With the risk of repeating, commercial transactions such as purchases in shops fall under market norms. This means that the social rules are not applicable and this includes that the fundamental norm of reciprocity, namely returning a favor, does not apply. Regardless of what is offered for free, may it be a sample, a product or even something completely unrelated such as small and usually useless gifts, it will be taken for free without anything being offered in return. Although people are not the cold thinking rational agents that Economics worships, humans are not stupid. If something can be taken for free, it will be taken. This is more the case if the part that offers something for free is not an individual, but an abstract organization or entity.

For example, in the largest supermarket network in The Netherlands – Albert Heijn – there is free coffee available for clients. The Dutch drink a lot of coffee and caffeine based drinks, so the idea is not bad. However, most of the people I have seen taking coffee for free fit the prototype of people who don’t buy too much simply because they can’t. It may very well be that for the corporation who owns these supermarkets the cost of giving free coffee is very low and any return in the form of increased purchases is covering the expense. However, my humble opinion is that this is only an opportunity for free riding.  

Let’s take a look at the up-side of using reciprocity or reciprocity-like mechanisms in commercial marketing. As you have learned up to now in both free riding and reciprocity a key role is played by the degree to which one can identify the source of the initial favor. Most people would not free ride if the free item was offered by a person who is self-employed or owns a small shop of coffee place. For example, people who go to the Bistro Chez Jacque will not take advantage of his free cookies and eat all of Jacque’s stock. However, the same people would have no problem in going to an Albert Heijn supermarket and drink all the free coffee they can without buying anything.

In a similar line of thought, if Jacque would give a drink on the house every once in a while the clients might reciprocate by leaving a larger tip. If the keeper of a small cheese shop offers his clients the possibility to taste the cheese it is likely that some of them might perceive it as a favor and reciprocate by buying a piece of cheese.   

  

The main idea is that reciprocity is a social act and in order for it to function the side that makes the initial favor must be a person and not an organization. People are going to buy an extra piece of cheese if the shop keeper offers them a free sample; this is even more likely if the shop keeper cuts the piece of cheese (the sample) in front of the customers, making it seem like he is doing it especially for them, like it is a favor. However, this is not true when the piece of cheese lies on a tray in an impersonal 5000 square-meters supermarket. Sales of cheese in supermarkets might increase by offering free samples, but people don’t buy it because they want to reciprocate. Rather they buy cheese because they were reminded that cheese should be bought or simply because buying cheese makes sense.

More impersonal entities such as web-sites or corporations can use reciprocity-like mechanisms, but these have to be in the form of clear trade-offs. One very good example comes from the Albert Heijn supermarket network. Each week some products are on sale and usually the discounts are considerable. This is nothing special since all supermarkets have weekly sales. The interesting thing about the Albert Heijn supermarkets is that the discount is given only if the client scans a barcode that is printed on the Bonus Card. This card is offered for free and usually without any long forms to be filled. This is an illustration of a clear exchange between the impersonal entity, namely the retail corporation, and the individual, namely the client. In this manner, the corporation gets what it needs, namely data to analyze and optimize their sales and the customer gets what she wants, namely the discount.

This type of clear relationship is not necessarily typical for social norms; if anything it is closer to market norms. It resembles reciprocity in the sense that it is a favor in exchange of a favor, but it is not exactly reciprocity.

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Time, too, Is Relative ... Decisions about Money across Time

When I was a bachelor student, during my Economics courses, I have learned that taking a loan from the bank is equivalent with accelerating consumption. For example, if Said wants to buy a car that costs 15.000 Euros then he has two major options. First, Said can save money for a certain period of time, let’s assume three hundred Euros each month. After fifty months when the amount needed to buy a car has accumulated in his savings account, Said can go and buy the car. Taking this path, Said has one advantage and one disadvantage. The advantage is that he will pay for the car only the 15.000 Euros that represent the actual cost. The disadvantage is that for five years and two months (fifty months) Said will not have the car.

The second option Said has is to go to a bank and ask for a loan of 15.000 Euros and buy the car as soon as the loan is approved. If he follows this path, Said will have the car as soon as possible, but will have to pay across five years both the 15.000 Euros which represent the cost of the car and the cost of the credit, let’s say about 3000 Euros.

As my former Economics teacher would say, the 3000 Euros Said pays for the loan represent, in fact, a cost for having the car earlier.

Taking the car out of the picture, Said faces the following question: How much would you need to get now in order to give up 18.000 Euros in five years’ time?

In the case of Said buying a car, the answer was 15.000 Euros. However, let’s assume that you are faced with a similar question, namely what is the minimum amount you would accept now in order to give up 10.000 Euros in one year time? 

What is your honest answer? Would 8000 be enough? 9000?

From a rational point of view there is a (so called) correct answer to this. You should ask for at least 9803 Euros. This is because if you take this amount and place it in a bank deposit for one year with an interest rate of 2%, after one year you will have 10.000 Euros in your account.

However I am sure that you would have been happy with 9000 and for sure you did not compute the amount using the average interest rate for bank deposits in Euros. Don’t worry, most people ask for less than 9803 Euros and it is quite OK to do so.

You have just learned about time discounting or more accurately inter-temporal discounting. People are willing to give up a part out of a future outcome in order to get it faster. The so called correct answer to the question above, namely 9803 Euros, was obtained through a formula specific for the Discounted Utility Model. In an ideal world the discount rate would be equal to the interest rate on the financial markets. Simply put, in an ideal world, you should have a discount rate equal to the interest rate on the financial market, namely 2%. In the same ideal world, you should have asked for 9803 Euros, and then go immediately to the bank and place them in a deposit for one year, subsequently benefiting of 10.000 Euros in one year from now.

Most of the time, the discount rate is larger than the interest rate on the financial markets. For example if you would have accepted 9000 Euros now in exchange for giving up 10.000 Euros in one year time, then your discount rate would have been 10%, which is significantly larger than the interest rate for one year deposits in Euros, namely 2%.

You might wonder if this is wrong; if it is wrong to have a discount rate of 10% which is larger than the so called correct one of 2%? The answer is that it is not wrong, because the Discounted Utility model was never meant to be the correct one, or in more scientific terms the normative one. When it was proposed by Paul Samuelson in 1937 it was simply a proposition of a theoretical model. The author never claimed that it was the right model for describing or prescribing how decision over time should be made. However, this model was embraced by the scientific community and before long it gained the status of the correct model.

Let’s move away from the debate whether the Discounted Utility model is correct or not and focus on a very interesting aspect of decision making over time. Imagine that I’m asking you the following question:

What is the minimum amount you would accept now in order to give up 10.000 Euros in Four years’ time?

Would you accept 6000 Euros? Probably not… How about 7500? I think that you would be happy with this amount. Right?

The interesting thing that happens when deciding about how much we would want for giving up later rewards is that apparently we don’t hold the discount rate constant. Let me explain a bit more clearly. Let’s assume that you would accept 9000 Euros now in order to give up 10.000 in one year from now. This means that your discount rate is 10%. If we hold this rate constant, you should accept 8100 Euros in order to give up 10.000 in two years’ time. This is 10% less than 9000 Euros. Applying the same rate, you should accept 7290 Euros in order to give up 10.000 in three years’ time. Again, this is 10% less than 8100, which in turn is 10% less than 9000 – the amount you accepted in exchange for giving up 10.000 in one year time. The question was what is the minimum amount you would you accept to give up on 10.000 Euros in Four years’ time. In order to find this out we should discount again with 10% the 7290 Euros sum, leading to the amount of 6561 Euros.

However, most people would not be happy with this amount and would ask for more than 6561 Euros in order to give up on 10.000 Euros in four years’ time. My guess is that the minimum accepted amount would be higher than 6561 Euros, or at least that is what theory tells us. Probably 7500 Euros is closer to the amount you would be happy with in exchange for 10.000 Euros in four years’ time.

The key learning of this thought exercise is that close rewards are discounted more than distant once. Putting things differently, the discount you would be willing to accept in order to get the reward now instead of in 12 months is higher than the discount you would be willing to accept in order to get the reward in 12 months instead of in 24 months. This phenomenon is called hyperbolic discounting.  

For a long time, the belief was that the mechanism behind hyperbolic discounting is the decreasing discounting rates. For example if the discount rate for the first year was 10%, then the discount rate for the second year would be lower, say 7%. Similarly, the discount rate for the third year would be even lower, say 5%. Quite recently, this assumption was challenged by a study conducted by Professor Zauberman and colleagues who proved that the mechanism behind hyperbolic discounting is not the decreasing discount rates, but rather the subjective perception of time. In this study the researchers proved that when taking into account the subjective perceptions of time, the discount rate remains constant.

To better understand, let’s focus a bit on what subjective perceptions of time mean. The essence is that a time period of, say, three years is perceived subjectively different from the sum of three one year intervals. Putting this in mathematical sequence, with sp being the subjective perception, it would look like this:

sp(3 years) < sp(1 year) + sp(1 year) + sp(1 year)

According to Professor Zauberman and colleagues, the subjective perception of time explains the difference between the minimum sums accepted to give up on sooner and later rewards. This finding is in line with conclusions on subjective perceptions of other types of values. For example, prospect theory tells us that people perceive probabilities different than their actual value, except for probabilities of zero and one. Similarly the contrast effect tells us that absolute values are judged depending on reference points. According to the study by Professor Zauberman and colleagues, time makes no exception to the rule of relativity. 

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This post is documented from:

Frederick, S., Loewenstein, G. & O'Donoghue T. (2002), "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, 40 (2), 351-401.

Zauberman, G., Kim, B.K., Malkoc, S. A., & Bettman, J. R. (2009). "Discounting time and time discounting: Subjective time perception and intertemporal preferences," Journal of Marketing Research, 46, 543-556.

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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Explaining to Yourself Your Own Actions - Need for Justification

Finding reasons for our actions is one very interesting and important psychological phenomenon. Self-justification is part of what is called cognitive dissonance which in a nut shell means that we change our beliefs to become congruent with our actions. For example if you would be forced to do something that you don’t agree with such as campaigning for the communist party (assuming that you dislike this party), later on you will start liking the communist party more than before. This is because you have done something that is against your own beliefs and now you have to make sense of your own actions. Because you need to have congruency between your actions and your beliefs and because your actions can’t be changed, you will alter your beliefs about the communist party.

This, however, is not what I am intrigued by. After all cognitive dissonance is a well-known effect and in the last decade it has been challenged and criticized. My interest is more on the side of how we find perfectly reasonable motives for our actions. An example is how we support with solid arguments our purchases. This is very different from cognitive dissonance because in the case of cognitive dissonance there are two major particularities. First a person is somehow forced to do something that is in disagreement with his own beliefs. Second, the person changes his attitudes or his beliefs after the behavior took place.

Imagine the following scenario. You go to a shop with the aim of buying some drapes. The same shop sells cooking-ware and you are magnetically attracted to a nice frying pan. In the spree of the moment you buy it. This was a totally unplanned purchase and not a very necessary one since you have five frying pans. On your way home you are thinking how you are going to explain your purchase to your significant other. While finding arguments for buying the sixth frying pan to provide your better half with, you think that one of the old pans was already too used, that the new one is ceramic coated and you heard on TV that the food cooked in such a frying pan is healthier and so on. Before arriving home, you have already good reasons to support your purchase in front of your better half.

Two very interesting things are that, first, when you made the purchase none of these arguments ever played a role. Cooking-ware manufacturers know that non-professional cooks buy cute stuff and subsequently design the products to be simply irresistibly cute. Your decision to buy the pan was made when you found it to be very nice and think that it would look good in your kitchen. The arguments about needing to replace the old one and the new one being ceramic coated that makes healthier food came only after you made the purchase, on the way back home.

The second interesting thing concerns you coming up with arguments to defend your purchase in front of your life partner who might be a bit critical with buying stuff that is not necessary. However, your better half is not the one who needs convincing the most. The person who needs the solid rational arguments is in fact you! You need to explain your actions to yourself and only after doing this you need to explain them to others. It is not unlikely that your life partner would be satisfied with a simple and more honest answer such as “I bought it because I liked it”. But you need to explain the action to yourself and very likely “because I liked it” is not satisfying enough. It might be an issue of ego, or simply a natural need of knowing that what you do is your choice.

The above mentioned example is quite trivial because it concerns impulsively buying a frying pan. At the same time, the need for justification is present in many areas of our lives. Quite often our actions are not result of our own reasoning and choice, but rather the outcome of a mixture of internal states, emotions and external factors such as the social and physical environments. However, we have the need to believe that there are good reasons for why we do what we do.

Justifying impulse purchases is only one illustration and as mentioned before not a very important one. Let’s think a bit about tax evasion and discrimination. Do we need to justify these behaviors? Of course we do, and I don’t mean in a court of law, but rather in our regular lives.

In my recent trip in my home country, I have encountered several juicy examples of the need for justification. For example, an entrepreneur who has a small business and somehow avoids paying in-full the taxes, explained me that he does so because public services are unsatisfying and the transport infrastructure is poorly developed. These sound like very solid arguments and the sad reality is that they are true. However, small scale tax evasion has nothing to do with bad roads and increased bureaucracy. It is simply something that is done by almost all small businesses to make an extra income. Most small firms do it because other small businesses do it; because it is possible to do it and because there are countless notorious examples of “stealing from the state and getting away with it.” However, going with the herd and following the example of corrupt politicians, business people and public servants are reasons that would make the small scale entrepreneur not very proud. At the same time justifying the small scale tax evasion with real problems such as bureaucracy and bad infrastructure is a lot more comfortable for the entrepreneur.

It goes similarly for discrimination. I have heard a lengthy and elaborate pleading against the Rroma (Gypsy) community and why this minority is the biggest problem of the country. Most of the arguments that supported this thesis were not very solid, but the person providing them was convinced of them. In the end of the so-called explanation, the old gentleman said that when he was a child he had a very negative experience with some members of the Rroma community. In 1934 he was kidnaped by a group of nomad gypsies and rescued by his parents a couple of months later.

The gentleman’s negative feelings towards his experience can’t be challenged, but finding so-called solid arguments to support the idea that an ethnic minority that represents less than 5% of the population is the main problem of the country is a bit far-fetched. However, this person needed to justify his negative feelings and supported them with reasons that in fact have nothing to do with the source of the feelings.

Quite often we justify to ourselves our actions and feelings (attitudes). The dilemma is whether we think before we do something or we think after we have done something and find reasons for our already done actions.

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How Clothes and Uniforms Influence our Judgment and Behavior

One of many typical games children play is dress up. They pick some clothes, many of which belong to the parents, and play different roles. Probably doctor and fireman are the most common choices. However, dress up is not reserved only for children; grownups do it too, but usually are unaware. Each time we go to a black tie party we dress up; each time we put on the work around the house clothes we dress up. The clothes we wear influence how we think and how we behave. The same person who in one instance is dressed up for a black tie party will behave significantly different when she is dressed in the work around the house clothes. In order to better understand how the clothes we wear influence our judgment and behavior, let’s talk about a particular type of clothing, namely uniforms.

Uniforms are something that we encounter several times each day and they are very diverse. However, when we think about uniforms the first thing that comes into mind is not the McDonalds or KLM uniforms, but rather it is the Police, Military or School uniforms. This is easily explicable because long before corporations started using uniforms they were used by state organizations such as the Military. The use of uniforms has several implications that will be briefly presented in the following paragraphs.

The first implication of uniforms is identification. Imagine a very bloody and heated battle between two tribes. In the heat of the battle it would be possible for members of the same tribe to harm or even kill each-other because they confused the other for an enemy. This is highly plausible. Nowadays this is called friendly fire that is a nice term for we killed our own.  In order to avoid the possibility of two warriors from the same tribe to slaughter each other, identification features were introduced. These evolved into military uniforms. The primordial role of uniforms is for the individual to be identified as a member of a certain group.

The second implication of uniforms is to enhance the feeling of belonging to a certain group. Whereas the primary role was to identify another individual as a member of a group, the second implication refers to the individual’s feeling of belonging to the group. When dressed up in, let’s say, a military uniform the individual has an increased sense of belonging to the group, in this case the army.

There is a limitation to increasing the sense of belonging through the use of uniforms, namely that in order to enhance the sense of membership, the group must have a well-defined identity. In the case of the army this is not an issue since the institution has a very well defined identity. However, if at a new organization uniforms are introduced, they will not help much in increasing the sense of belonging if the organization has a weak identity. In simpler words, in order to increase an individual’s feeling of membership, first there must be something to belong to.

The third implication of uniforms is that they create anonymity. Once in a uniform the individual is less himself and more of just another member of a group. In the case of the army things are quite straight forward. The new recruit Hans is not any more the young man who lived in a quiet peaceful town with his working class parents. He is now a soldier; he is now just another soldier in the army. In other cases anonymity is slightly smaller than in the case of the army, but still exists. For example most shoppers in an Albert Heijn supermarket notice mainly the uniforms of the employees and significantly less the individuals who are wearing them.

The sense of anonymity leads to increased aggression. For example warriors who wear masks are more brutal than similar warriors who do not use masks. A much closer example of increased aggression due to anonymity is in the on-line environment. Behind nicknames or avatars a lot of people are brave, rude and aggressive. However, the same people would behave like pussy-cats when they are stripped of their disguises. The increased aggression of individuals who perceive themselves as anonymous is attributed to a lack of accountability. This implies that organizations that use uniforms should make sure that their members are aware of their accountability for their acts.

The fourth and, in my view, the most important implication of uniforms is that they induce prototypical judgment. In an earlier post on priming you have learned that exposure to a certain piece of information makes a mental construct more salient in the mind, thus influencing subsequent judgment and behavior. You have also learned that asking people to think like a trader influences judgment. Simply put, when we ask somebody to think like a prototypical character we are asking them to put themselves in the shoes of the character.

In the case of uniforms things go even further. By dressing up an individual in a uniform that is prototypical for a category, the person is in the shoes of the prototype.  For example dressing a regular person in a military uniform will make that person act in a more militaristic way. Similarly if someone would dress up in a doctor’s uniform she would speak using more medical terms and overall would behave more like she thinks and knows a doctor behaves.

The process behind these changes is the following. We have stored in our minds prototypes and their specific behaviors. When dressed as a prototypical character, say police people, all the mental constructs related to the police are salient in the mind. Moreover, the person is now like the prototype of a police person. Subsequently the individual will exhibit behavior specific for the prototypical character.

This post began with a discussion about clothes and how they make us think and behave differently. Uniforms are the best illustration of this phenomenon, but by far most people are not using uniforms. However, most people have different types of clothes. We have office clothes, pajamas, work around the house clothes, party outfits and so on. Each of these types of clothes is associated with a specific context and when we wear them information related to the context becomes salient in our minds. This in turn influences how we think and how we behave. Usually we use clothes that are appropriate for each specific situation. For example we don’t go to business receptions dressed in pajamas and we don’t vacuum the house in our party outfits. However, there are a few instances when we might not bother to change into more appropriate clothes. I’ll illustrate this with an example soon, but before that, there is another effect of clothes that should be mentioned.

In an earlier post you have learned that the furniture we use influences our body posture which in turn influences judgment and behavior. Clothes have a similar effect, especially when it comes to the position of shoulders. The shape and the cut of a shirt, coat or T-shirt influences the position of one’s shoulders. Some cuts favor an up-right position, while other cuts favor a round-shouldered position. This might not seem much, but the two shoulder positions are specific for very different internal states. The up-right is associated with increased confidence, while the round-shouldered is specific for very low confidence.

I would like to conclude this chapter with an anecdotic example from my own experience. When my wife finished her Master program she had to give a presentation on her thesis. Since it was something very important, at least at the time, she practiced a lot. At one point she decided that it is time to have some rehearsals in front of an audience and the audience was me. She asked me to help her in any way I can. I said that I would like to see the full presentation once and after I will give her some tips. So we placed the beamer on the table, the laptop next to it, Cornelia, my wife, was standing  next to them and I was sitting on the couch. She began the presentation and not before long some stuttering occurred.

I knew how much she had prepared and I was a bit surprised by these mishaps. Moreover, I was surprised by the lack of confidence she had while giving the presentation. This was not justified by anything since the thesis was good and she had worked on it for many months. Then I realized that both Cornelia and I were still wearing our staying in the house clothes. As you can imagine the clothes were quite loose and comfortable, maybe too comfortable. I noticed especially how her comfortable blouse was making her shoulders to not be up-right.

Realizing all these, I asked Cornelia to go and change into the clothes she plans to use for the actual presentation. She did so and in addition put on her elegant shoes. She started again the rehearsal and this time it went very well and very smooth. There were only a few fine tunings to be done and after three rehearsals everything was close to perfect. The actual presentation went very well, too.

Learn more on my book: It Makes (No) Sense: Between the Joy of Gaining and the Fear of Losing

The Secret Behind Complicated Application Procedures

Take for example all the complicated and time consuming application procedures for getting admitted into a good university. Apart from having high scores on standardized tests, an applicant must fill in endless forms, upload a lot of documents, write motivational essays etc. Presumably universities want many students because it is one of the ways in which they make money. So, why is it that universities make it hard for people to apply for their programs? Is it because they want to not have too many applicants?

The answer to the questions above is that the complicated application procedure is in itself a part of the selection for admission process. One obvious element that is verified by asking applicants to go through a complicated procedure is motivation. Many people who would apply just for fun or to simply see what happens are discouraged to apply. This leads to avoiding an overload of the admissions office with applications from people who would no follow through.   

However, the motivation part is only one side of the advantages of having complicated application procedures. In order to better understand the other sides, let’s think a moment about the admission criteria and the profile of a good candidate. Although universities want many students, they also want good students who will be able to go through the education programs without too many troubles. Universities don’t want to have students who constantly fail exams and who need four years to finish a one year program.  This means that the education institutions want to admit candidates who have a good academic performance potential.

Recruiting and selection are mostly focused on assessing the personality of each candidate and making a decision on how well each personality fits with the ideal candidate profile. When it comes to academic, as well as job, performance there are two personality traits that are very good predictors, namely intelligence and conscientiousness. Intelligence can be defined in a nutshell as capacity of processing information and we have to admit that for academic performance the overall rule of the more the better applies. Conscientiousness can be defined briefly as ability to work hard, to work thorough on a task. Again, when it comes to reading textbooks, doing homework and other typical academic work tasks, the higher the level of conscientiousness a candidate has, the better the candidate.

Intelligence and conscientiousness are not the only predictors of academic or job performance, but out of the wide array of personality traits, they are the best predictors. So, universities want to get students who are highly intelligent and score high on conscientiousness. Although everyone seems to have an idea of what intelligence is, the reality is that this particular personality trait is not very easy to measure. In order to measure someone’s IQ, the person has to take an IQ test. Universities don’t explicitly ask for IQ test scores, since that would create endless controversies; what they do, is ask candidates to provide their scores on standardized tests such as the GMAT, in the case of business schools, or SAT. All these standardized tests are disguises for IQ tests. This is not to say that the GMAT is an IQ test, but rather to say that a candidate’s score on the GMAT is highly correlated with that candidate’s IQ score. To conclude on how universities assess candidates’ IQs is not by giving them actual IQ tests which would lead to controversies, but by using a proxy of intelligence scores, namely scores on standardized tests such as GMAT, GRE and SAT which are not subject to controversy.

Having clarified the way in which universities assess the intelligence levels of their candidates, it is time to look a bit on how they assess the conscientiousness levels of people who apply for education programs. The first way to assess conscientiousness is through the same standardized tests. If you have taken such a test, you probably noticed that they are completely unappealing and, in my humble opinion, really boring. In preparing for and actually taking such a test there is no intrinsic task motivation. The test has to be taken for the sake of taking it and with the only goal of scoring high.

A byproduct of the introduction and wide use of standardized tests is the development of a real industry of learning test taking. A quick search on amazon.co.uk with the key-word GMAT returned over one thousand results. This is only one standardized test and the search was done only on one website. The reliance on standardized tests led to a need of learning how to take the test. From a certain point of view, this is not exactly great, but from another point of view the difficulty of test taking is one of the key elements of standardized tests. By making a test difficult to take and by making people work a lot and prepare for taking a standardized test, the test actually measures conscientiousness. The higher the level of conscientiousness one has, the more she will work on the mostly pointless tasks of test taking and subsequently the higher the score on the test will be. In a nutshell, standardized test measure both intelligence and conscientiousness.

When it comes to assessing a candidate’s level of conscientiousness, universities go beyond relying only on the scores on the standardized tests. They also make the application procedure lengthy, complicated and somehow boring. By asking candidates to fill in endless forms, to write essays and to upload many documents, universities, in fact, assess the level of conscientiousness of each candidate. People who have a low level of this trait simply fail to complete the application procedure.

Before concluding this example of the up-side of making things harder, I have to make a final point regarding the predictive value of intelligence and conscientiousness on academic performance. Their predictive value is real, but applies mostly for average levels of the two traits. In other words, at the extremes of each trait, the differences are insignificant. For example, if one candidate has an IQ of 160 and another has an IQ of 163, the three points difference will not predict too much. However, a difference of three points between an IQ of 99 and an IQ of 102 will predict better academic performance. Extremes on these traits are very rare; there are very few people in the world with extremely high IQs and with very high scores on conscientiousness. Universities know this and act accordingly. In selecting future students who will perform well, the primary goal is not to get the exceptionally good ones, but rather to make sure that the not so good ones are not admitted. The complicated and time consuming application procedure will not distinguish between the people with very high and exceptionally high levels of conscientiousness. Rather, it will distinguish between the people with low and average levels of conscientiousness. 

Learn more on my book: It Makes (No) Sense: Between the Joy of Gaining and the Fear of Losing