When being wasteful appears better than feeling wasteful

"Waste not want not" expresses our culture's aversion to waste. "I could have gotten the same thing for less" is a sentiment that can diminish pleasure in a transaction. We study people's willingness to "pay" to avoid this spoiler. In one scenario, participants imagined they were looking for a rental apartment, and had bought a subscription to an apartment listing. If a cheaper subscription had been declined, respondents preferred not to discover post hoc that it would have sufficed. Specifically, they preferred ending their quest for the ideal apartment after seeing more, rather than fewer, apartments, so that the length of the search exceeds that available within the cheaper subscription. Other scenarios produced similar results. We conclude that people may sometimes prefer to be wasteful in order to avoid feeling wasteful.waste aversion, mental accounting, violation of dominance, counterfactual, regret

The Limits to Moral Erosion in Markets: Social Norms and the Replacement Excuse

This paper studies the impact of a key feature of competitive markets on moral behavior: the possibility that a competitor will step in and conclude the deal if a conscientious market actor forgoes a profitable business opportunity for ethical reasons. We study experimentally whether people employ the argument "if I don’t do it, someone else will" to justify taking a narrowly self-interested action. Our data reveal a clear pattern. Subjects do not employ the "replacement excuse" if a social norm exists that classifies the selfish action as immoral. But if no social norm exists, subjects are more inclined to take a selfish action in situations where another subject can otherwise take it. By demonstrating the importance of social norms of moral behavior for limiting the power of the replacement excuse, our paper informs the long-standing debate on the effect of markets on morals

Scientific Proof versus Legal Proof: Ruminations about Mathematical and Statistical Reasoning in Legal Factfinding

Scientists try to find out the truth about our world. Judges in a court of law try to find out the truth about the target events in the indictment. What are the similarities, and what are the differences, in the procedures that govern the search for truth in these two systems? In particular, why are quantitative tools the hallmark of science, whereas in courts they are rarely used, and when used, are prone to error?

Location, Location, Location: Position Effects in Choice Among Simultaneously Presented Options

Since its inception, psychology has studied position effects. But the position was a temporal one in sequential presentation, and the dependent variables related to memory and learning. This paper attempts to survey position effects when position is spatial (namely, position=location), all stimuli are presented simultaneously, and the dependent variable is choice. Unlike the ubiquitous "serial position curve", position effects in simultaneous choice are not consistent. A middle bias (advantage to being away from the edges) is the most common, but advantages to being first, last, or both, have also been recorded.

Surprising Psychology And The New Unconscious: Challenges For The Law.

Recent research in psychology, especially that called "The New Unconscious", is discovering strange and unintuitive phenomena, some of which raise interesting challenges for the law. This paper discusses some of these challenges. For example, if much of our mental life occurs out of our awareness and control, and yet is subject to easy external manipulation, what implications does this have for holding defendants responsible for their deeds? For that matter, what implications does this have for trusting judges to judge and act as they should, and would, if their own mental processes were fully conscious and controlled? Some provocative ideas are suggested, such as how to make prison terms shorter and more deterring at the same time; assisting judges in overcoming inconsistency and biases; etc.

A Commentary on Mel Rutherford's 'On the Use and Misuse of the "Two Children" Brainteaser'

Rutherford (2010) criticizes the way some people have analyzed the 2-children problem, claiming (correctly) that slight nuances in the problem's formulation can change the correct answer. However, his own data demonstrate that even when there is a unique correct answer, participants give intuitive answers that differ from it systematically -- replicating the data reported by those he criticizes. Thus, his critique reduces to an admonition to use care in formulating and analyzing this brainteaser -- which is always a good idea -- but contributes little to what is known, analytically or empirically, about the 2-children problem.

The psychological insights that won a Nobel Prize in Economics

A Nobel Prize in Economics was given to the psychologist Daniel Kahneman for his joint research with the late psychologist Amos Tversky on decision making under uncertainty and on subjective judgments of uncertainty. The two proposed Prospect Theory as a descriptive alternative to Utility Theory, the reigning normative theory of choice under uncertainty. Kahneman and Tversky argued that human psychology prevents people from being rational in the sense required by Utility Theory -- consistency -- for two main reasons. First, people are more sensitive to changes in position (economic or otherwise) than to final positions, a fact ignored by Utility Theory. Thus, they value a 50% discount on a 100NIS item more than a 5% discount on a 1000 NIS item. Moreover, they are more sensitive to changes for the worse than to changes for the better. Second, we are sensitive not just to outcomes, but to outcomes-under-a-description, which makes us inconsistent from a consequentialist veiwpoint (e.g., we don't feel the same about losing 100 NIS on our way to the theater boxoffice, vs. losing a 100 NIS ticket on our way to the theater). The article describes some of the empirical observations that led to the development of Prospect Theory, and some of its basic tenets.