Category: Decision making

We have an ingrained anti-profit bias that blinds us to the social benefits of free markets

GettyImages-1538307.jpgBy Christian Jarrett

“Harnessing the ‘base’ motive of material self-interest to promote the common good is perhaps the most important social invention mankind has yet achieved,” said the American economist Charles Schultz. And you can see why. While acknowledging its problems, many credit free market capitalism for the dramatic reduction over recent decades in the proportion of people in the world living in extreme poverty, not to mention rising health standards and technological advances. Conversely, according to some commentators, one only has to look to modern-day Venezuela to see the dangers of extreme anti-profit socialism.

And yet, according to a new paper in Journal of Personality and Social Psychology, most of us have an instinctual anti-profit bias. We view for-profit companies and industries – upon which capitalism is based – with inherent distrust, assuming that the more profitable they are, the more harm they do to society. In fact, research shows the opposite is true: companies that make greater profits actually tend to contribute more value to society, for example in terms of their environmental responsibility and corporate philanthropy.

The authors of the new paper, led by Amit Bhattacharjee at Erasmus University, believe this anti-profit bias leads many voters and politicians to endorse anti-profit policies that are likely to lead to the very opposite outcomes for society that they want to achieve. “Erroneous anti-profit beliefs may lead to systematically worse economic policies for society, even as they help people satisfy their social and expressive needs on an individual level” they said.

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The intuition blindspot: just because you like going with your gut doesn’t mean you’re good at it

GettyImages-825698716.jpgBy Emma Young

In 1750, Benjamin Franklin wrote: “There are three things extremely hard: steel, a diamond, and to know one’s self.” Since then, plenty of research has proven him right: we’re not much good at knowing ourselves and, sadly, we’re especially bad when it comes to judging traits in ourselves that we care about the most. Now Stefan Leach and Mario Weick at the University of Kent, Canterbury, have added to this sorry picture of human delusion, reporting in Social Psychological and Personality Science that people who believe they’re intuitive are no better than anyone else at tasks that require intuition.

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Critical thinking skills are more important than IQ for making good decisions in life

GettyImages-536092577.jpgBy Alex Fradera

To lead a good life, we need to make good decisions: manage our health and financial affairs, invest in appropriate relationships, and avoid serious lapses like falling for online scams. What equips us to do this? One candidate is IQ: after all, people who score higher on intelligence tests tend to go on to do better academically and in their careers. But many of us know intellectual titans who still make grave errors of judgment in their lives. Book-smart doesn’t necessarily make you life-smart, and a new article in the journal Thinking Skills and Creativity examines the utility of IQ in navigating existence, and how another mental ability may put it in the shade.

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Why autistic people may be less susceptible to marketing tricks

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By Emma Young

We know from past research that autistic people process the world differently at a perceptual level, including showing reduced sensitivity to context. One consequence is that they’re better than average at finding figures in complex shapes. But does this way of looking at the world also influence their higher-level decision-making? According to a new study in Psychological Science, it does: William Skylark and his University of Cambridge colleagues George Farmer and Simon Baron-Cohen found that people with autism spectrum conditions (ASC) – as well as people in the general population with relatively high levels of autistic traits – make more “conventionally rational” decisions, which could influence everything from how they vote to what products they choose to buy.

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5 Reasons It’s So Hard To Think Like A Scientist

By Christian Jarrett

Thinking like a scientist is really hard, even for scientists. It requires putting aside your own prior beliefs, evaluating the quality and meaning of the evidence before you, and weighing it in the context of earlier findings. But parking your own agenda and staying objective is not the human way.

Consider that even though scientific evidence overwhelming supports the theory of evolution, a third of Americans think the theory is “absolutely false”. Similarly, the overwhelming scientific consensus is that human activity has contributed to climate change, yet around a third of Americans doubt it.

We Brits are just as blinkered. In a recent survey, over 96 per cent of teachers here said they believed pupils learn better when taught via their preferred learning style, even though scientific support for the concept is virtually non-existent. Why is it so hard to think like a scientist? In a new chapter in the Psychology of Learning and Motivation book series, Priti Shah at the University of Michigan and her colleagues have taken a detailed look at the reasons, and here I’ve pulled out five key insights:

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Heads in the sand: Most of us would prefer not to know whether bad things are going to happen

Business men hiding head in sandBy Alex Fradera

Humans are infovores, hungry to discover, and nothing holds more fascination than the future. Once we looked for answers through divination, now science can forecast significant events such as the onset of certain hereditary disease. But the fact that some people choose not to know – even when information is accessible, and has a bearing on their lives – has encouraged scientists, including Gerd Gigerenzer and Rocio Garcia-Retamero, to try to map out the limits of our appetite for knowledge. Their recent study in Psychological Review suggests that it is a fear of what we might discover – and wishing that we’d never known – that often drives us to deliberate ignorance.

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A five-minute chat with preschoolers about their past or future selves helps them make better decisions

Little girl's legs in glitter shoes on snowBy Christian Jarrett

There could be an Arctic blizzard blowing outside for all little Mary cares. The fact is, she’s hot from running around indoors, and no matter how much you try to explain to Mary that her future self – the one that’s about to go walking in the cold – would really appreciate that she put her coat on, Mary, like most kids aged under five, finds it very difficult to step outside of the present and consider her future needs.

While psychologists have already spent a lot of time demonstrating the limitations of young children’s ability to plan for the future, until now they’ve not looked much at whether it’s possible to target these “prospective abilities”. However, a new study in Developmental Psychology has done that, showing that a mere five-minute chat about their recent past or future selves seems to help preschoolers remember to do things in the future, and to “time travel” mentally, so that they make better decisions about their forthcoming needs.

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Risk-taking teens’ brains seem to disregard past bad outcomes

Two Male Freerunners Jumping Over a Wall Performing ParkourBy guest blogger Lucy Foulkes

Adolescents take more risks than adults: they are more likely to binge drink, have casual sex, commit crimes and have serious car accidents. In fact, adolescence is a paradox because it is a time of peak physical fitness, but also the time when people are most likely to be injured or killed in an accident. For this reason, it’s critical to understand what drives teenagers to take more risks. To date, many explanations of teenage risk taking have focused on the positive side of these behaviours: the rewarding “kick” that comes from taking a risk that ends well. Some studies have shown that teenagers experience more of this rewarding feeling, and this contributes to the increased risk taking seen at this age.

Fewer studies have considered how teenagers respond when risks turn out badly. This is important because all our previous experiences, both good and bad, affect our subsequent behaviour. If we make a risky decision like gambling money, and it pays off, it’s more likely we’ll decide to gamble again in the near future. Equally, if we take a gamble and it turns out badly, we’ll probably be a bit more reserved next time. But it turns out that some teenagers don’t respond like this: according to a new study in NeuroImage, some of them do not adjust their behavior so readily when things go wrong, and this may be linked to a distinct pattern of activation in their brains.

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High population density seems to shift us into a future-oriented mindset

613445810_2249c2d193_bBy Christian Jarrett

In the UK we’re familiar with the practical implications of increasing population density: traffic jams, longer waits to see a doctor, a lack of available housing. What many of us probably hadn’t realised is how living in crowded environment could be affecting us at a deep psychological level, fostering in us a more future-oriented mindset or what evolutionary psychologists call a “slow life history” strategy.

In their paper in the Journal of Personality and Social Psychology, Oliver Sng at the University of Michigan and his colleagues present a range of evidence that shows how this strategy plays out in the more patient ways that we approach our relationships, parenting and economic decisions. In essence, the researchers are proposing that the presence of greater numbers of other people in close proximity prompts us to invest in the future as way to compete more effectively.

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Psychologists uncover a new self-serving bias – if it’s my theory, it must be true

By Christian Jarrett

If you look at the research literature on self-serving biases, it’s little surprise that critical thinking – much needed in today’s world – is such a challenge. Consider three human biases that you may already have heard of: most of us think we’re better than average at most things (also known as illusory superiority or the Lake Wobegon Effect); we’re also prone to “confirmation bias”, which is favouring evidence that supports our existing views; and we’re also susceptible to the “endowment effect” which describes the extra value we place on things, just as soon as they are ours.

A new paper in the Quarterly Journal of Experimental Psychology by Aiden Gregg and his colleagues at the University of Southampton extends the list of known biases by documenting a new one that combines elements of the better-than-average effect, confirmation bias and the endowment effect. Gregg’s team have shown that simply asking participants to imagine that a theory is their own biases them to believe in the truth of that theory – a phenomenon that the researchers have called the Spontaneous Preference For Own Theories (SPOT) Effect.

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