If death is the great tragedy of human life, could rituals, by helping us connect backward to heritage and forward to the future, suppress time and reduce our fear of the end of life?
Kate Christensen | Joint research with Hal Hershfield
Abstract: Consumers often adopt a "give-it-to-me-now" mindset, choosing to spend in the present rather than save for the future. They choose to purchase material goods that generate unhappiness inducing social comparison (purses, cars) rather than experience goods (vacations) that lead to greater happiness over time (Van Boven and Gilovitch 2003). How can we help consumers spend less on material goods and invest more in the life experiences (vacation, retirement) that make them happy? Cozzolino et al. (2004) have written that thinking about the end of life can lead to a decreased interest in both possessions and wealth. To the extent that consumers are aware of the temporal limits of human life, we hypothesize that time will appear to be more valuable and money will appear to be less valuable; intertemporal discount rates will decrease and saving for the future will become easier. A decreased interest in possessions might also lead to an increased preference for experience goods. These preferences will likely vary depending on characteristics of the decision problem (e.g., mortality salience), decision situation (e.g., if the consumer is under time pressure), and the decision maker (e.g., if the consumer is more or less experienced at choice-making). This study will advance understanding of how consumer choices vary when they feel that life is limited and so will have applied value for business and public policy.
Urgency in Consumer Decision Making
Hal Hershfield | Joint research with Joseph Reiff
Abstract: Many societal challenges facing consumers, such as mitigating climate change or increasing retirement savings, are said to require urgency. Yet, researchers have only just started exploring the construct of urgency and how it shapes judgments and decisions. What is urgency, why does it matter, and how can policy makers and marketers increase it? We plan to explore these questions in the current research program. Specifically, we define urgency as a preference for earlier action over later action. We plan to (1) develop a novel measure of urgency, showing that some people have a strong preference to act now, rather than later, even if that means forgoing significant amounts of money, (2) show that this preference negatively predicts consumer demand for certain behaviors that require delayed actions (e.g., borrowing, pre-commitment), and (3) show how to frame products to increase take-up by appealing to urgency.
Misperception about stigma as a potential barrier to applying for benefits programs
Sherry Wu | Joint research with Eugene Caruso and Alice Lee-Yoo
Abstract: Numerous health and nutrition-related benefits programs are available in the US. One example is CalFresh in California and Colorado, a food stamps program designed to improve economic and health outcomes for low-income individuals and families. Yet, nearly 30% of people living in poverty today do not apply for the benefits they are eligible for. We hypothesize that much of this attrition can be eliminated by reducing psychological barriers driven by applicants' beliefs and narratives about the program. Our data suggest that one potential mechanism that may drive people away from applying for the benefits is the stigma attached to receiving financial assistance. However, we find that this stigma is a misperception. In this research, we aim to develop and test theoretically-grounded interventions to increase take-up rates in these benefit programs and test whether correcting this misperception would increase take-up rates.
Interventions to Increase Support For Redistributive Policies
Franklin Shaddy | Joint research with Kate Christensen and David Dolifka
Abstract: The American Dream promises equal opportunity to achieve social mobility and economic success, no matter a person’s circumstances of birth or station in life. But today that promise seems to have been broken: The rich are getting richer, and the poor are getting poorer (Global Wealth Report 2019). As the divide between the “haves” and “have-nots” grows wider, redistributive policies are increasingly important to ensure equal access to opportunity. Yet, redistributive programs – such as wealth tax, estate tax, and “Baby Bonds” – remain largely unpopular. In this project, we aim to increase support for such policies by identifying and testing various interventions. Our approach is broadly aimed at shifting perceptions of fairness, which, in turn, should increase support for redistributive policies. We draw from research literatures exploring perceptions of time, desert, and empathy to design practical interventions capable of changing public opinion around redistribution.
Why Do Consumers Ignore Hidden Costs?
Abstract: Prior research documents that consumers appear to ignore hidden costs (costs not explicitly written on price tags) associated with products they buy. Using a series of experiments eliciting willingness to pay for common consumer products that have hidden costs, we investigate the sources of this inattention in an ongoing project. Our work to date suggests that lack of knowledge, forgetfulness, and incorrect information about hidden costs do not account for inattention. Much of the existing work documenting inattention has difficulty differentiating between these hypotheses. We find that participants demonstrate familiarity with the hidden costs of the products they see (ruling out lack of knowledge), yet willingness to pay is insensitive to reminders (indicating that consumers are not forgetful) and to the provision of objective information about hidden costs (ruling out incorrect information). In ongoing research, we test several additional explanations for inattention including the idea that cognitive distraction leads consumers to ignore hidden costs and that information must be shown visually on a price tag, rather than merely known, to grab the consumer’s attention. Our current and future findings will yield a better understanding of why and when hidden costs are likely to be ignored.
Equity and environmental attitudes in adoption of rooftop solar photovoltaic in Los Angeles County
Charles Corbett | Joint research with Hal Hershfield and Timothy Malloy
Abstract: A recent paper in Nature Sustainability (Sunter et al. 2019) uses data from Google’s Project Sunroof to document that Black- and Hispanic-majority census tracts show significantly lower rates of solar PV installation, even after accounting for differences in household income and home ownership. As part of a project funded by the UCLA Sustainable Los Angeles (SLA) Grand Challenge, the current research team conducted a survey of 4,207 homeowners in Los Angeles County in April 2018. The survey focused on drivers of adoption of rooftop solar photovoltaic (PV). This project will focus on examining whether our survey responses shed new light on reasons for the disparities in adoption of rooftop solar documented by Sunter et al. (2019). For instance, we will explore to what extent these disparities also occur in LA County, and whether they are driven more by neighborhood-level, individual or other factors.
The Role of Claim Objectivity on Source Memory
Stephen Spiller | Joint research with Daniel Mirny
Abstract: In choice contexts, consumers frequently consider past information received from other people. Friends share their experiences from restaurants, critics write movie reviews, and past guests leave online reviews for AirBnB rentals. In order to integrate past information into a decision, it is necessary to recall the source of the information, for matters of both quality (credibility) and taste (alignment with personal preferences). Through a series of studies, we explore how source memory for opinions differs from source memory for factual statements and investigate potential moderators. Preliminary findings suggest that consumers are better able to recall the sources of opinion claims than the sources of factual claims.
Consumer Financial Decision Making
Stephen Spiller | Joint research with David Dolifka
Abstract: When consumers make financial decisions, they may consider both the supply and demand of their financial resources. In three related projects, we seek to better understand how consumers perceive their supply of available money. Our first project considers whether financial growth is treated like available money. To this end, we explore conditions under which consumers are more or less likely to track initial associations (such as earmarkings) to downstream financial growth. Preliminary results suggest the extent to which growth is treated as available money may depend on the strength of association between the growth and its source. A second project (with Stephanie Smith) presents equivalent supply information as both a daily income and a current balance. Using mouse-tracking data, we observe how preferentially attending to either presentation form is associated with consumer spending. Early findings suggest spending is greater when consumers attend more to balance information. Extending these results, a third project investigates individual differences in how consumers respond to changes in their supply of money. Specifically, we estimate individual sensitivity to financial changes presented as either stocks or flows. These three related projects will ultimately contribute to our understanding of how consumers assess their available supply of money.
How Metrics Influence Elicited Prediction Intervals
Stephen Spiller | Joint research with David Zimmerman
Abstract: Metrics matter for consumer judgments and decisions (e.g., De Langhe & Puntoni 2016; Larrick & Soll 2008; Spiller, Reinholtz, & Maglio 2020). People make different decisions and judgments when considering different equivalent metrics, such as a car’s fuel efficiency in terms of miles per gallon (MPG) vs. gallons per 1,000 miles (GPkM), or the state of the economy in terms of jobs gained or lost vs. people employed. We propose two ways elicitation metrics may impact prediction interval judgments: symmetry and scaling. First, if people implicitly assume distributions are roughly normal (Flannagan, Fried, & Holyoak 1984), then metrics that are inverses of each other will become distorted when converted to the alternative representation. For example, prediction intervals which are symmetric when elicited in MPG or GPkM will typically not be in the alternative metric. Second, people may tend to believe that uncertainty scales with quantity, such that bigger quantities have greater uncertainty (Weber, Shafir, & Blias 2004). For example, predictions in a flow metric may typically have smaller prediction intervals than those in a stock metric because the units typically have smaller numeric values. These proposals reinforce the importance of attending to the metric of elicitation in judgmental forecasts.
Suspense, Surprise: What Makes a Match Fun and Engaging?
Ashvin Gandhi | Joint research with Paola Giuliano
Abstract: What determines the entertainment value of a game? Ely, Frankel, and Kamenica (2015) develop a formal model of suspense and surprise for analyzing entertainment value. We plan to apply their methodology using data from the video game League of Legends, a popular online game that combines real time strategy, role-playing game elements, and team coordination. League of Legendspresents an ideal context to study the effects of suspense and surprise on enjoyment and engagement in leisure activities. In each of League of Legends’s matches the two potential outcomes are that one team (say, the Blue team) wins or loses. A period in a match has more suspense if the variance of the next period's probability that Blue Team wins is greater. A period has more surprise if the probability that Blue team wins is further from the last period's probability. Unlike typical sporting events, the people engaged in the game are predominantly players, not fans, and they exhibit measurable behavior. This allows us to link suspense and surprise of a match to an immediate objective behavior, such as player continuation. In addition, self-reported responses to “fun” surveys are recorded and constitute a way to measure enjoyment. In order to perform this analysis, we have acquired a unique dataset containing nearly 200 variables from Riot Games, Inc. characterizing the minute-by-minute state (position, gold, experience, etc.) of approximately 10 million games. Our data also indicate whether players played prior to the observed game and continued with additional games afterwards. For a small subset of the data, we also observe surveyed enjoyment.
How does Food Availability Affect Demand for Healthy Food?
Sylvia Hristakeva | Joint research with Julia Levin
Abstract: The relationship between nutrition and income is well-documented – lower income households purchase and consume less healthy food than higher income households. The media and policy makers often attribute this relationship to a lack of supply; that is, lower-income households are more likely to live in neighborhoods with low availability of healthy foods, so-called food deserts. However, as supermarket entry and exit is likely endogenous, the literature has not evaluated the causal effect of food availability on demand for healthy food. To address this question we exploit the variation in store closures caused by hurricanes: hurricanes occur naturally, and the exact timing and location of a hurricane is random and thus uncorrelated with consumer purchases. We identify a group of households that regularly visited one or more stores that closed due to a hurricane, and analyze the purchase behavior before and after the store is removed from their choice set. Preliminary analysis finds that households affected by store closures purchase less fresh produce than a synthetic control group.