Predictably Irrational (13 page)

This experiment worked much like the previous one, except we returned to the trusty and super-delicious Lindt chocolate truffles (which were by now an experimental staple for us). We offered the chocolates to passing students at a broader range of prices. We'd already seen what economists call a “backward sloping demand curve” when the price was reduced from 1¢ to free (meaning demand went down instead of up when the price decreased). What would happen to demand when we decreased the price from 10¢ to 5¢? From 5¢ to 1¢? Or, as in the first experiment, when we decreased the price from 1¢ to free?

When we dropped the chocolate prices from 10¢ to 5¢, the predictions of both laws of demand were verified, and in total we saw an increase in demand of about 240 percent. Similarly, when the price went from 5¢ to 1¢, the predictions of both laws of demand were verified, and in total we saw an increase in demand of about 400 percent. But, as we saw in our first experiment when we reduced the price from 1¢ to free, the first law of demand was verified (more people stopped for chocolate) but the second law of demand was disconfirmed (the people who took chocolate took less not more), and in total, with more people taking less, we saw a decrease in demand of about 50 percent.

What these results mean is that the theory of demand is a solid one—
except
when we're dealing with the price of zero. Whenever the price is not part of the exchange, social norms become entangled. These social norms get people to consider the welfare of others and, therefore, limit consumption to a level that does not place too much of a burden on the available resource. In essence, when prices are zero and social norms are a part of the equation, people look at the world as a communal good. The important lesson from all of this? Not mentioning prices ushers in social norms, and with those social norms, we start caring more about others.

A
NOTHER IMPORTANT LESSON
from Chapter 4 was about the ability to obfuscate exchanges in nonfinancial terms and, by doing so, avoid squashing (“crowding out,” in economic terms) the benefits of social norms. (Giving your mother-in-law a gift is a good idea, but paying her for a wonderful Thanksgiving dinner is not recommended, even if both gestures would cost you the same amount of money.)

If obfuscation can provide an important wedge that keeps us humming along the social norm track, and if gifts are one mechanism for obfuscating, what about other such mechanisms? What about effort? Over the years, I have been a beta tester for many software products, and in retrospect, it is amazing to realize how much time and effort and how many computer crashes I have endured from this activity. Could it be that because these software companies asked me for my time and effort without offering money, I was eager and happy to help them, even at substantial cost to myself?

Now, effort is clearly not the same as a gift, but could it be that it is also different from money? Perhaps there's a range with strict financial exchange norms at one extreme, pure social norms at the other, and effort somewhere along this spectrum? What, we wondered, might happen in a nonmonetary exchange involving only effort? Would effort undermine social norms in the same way that financial transactions do? Does an exchange of effort keep the social norms intact, similar to the effect of not mentioning money at all? Or might it fall somewhere in the middle of this spectrum?

To explore this notion, we set up a new experiment. This time, we had a research assistant roam around the MIT Media Laboratory with a tray that was always stacked with fifty Lindt truffles. In the “free” condition, she simply asked people, “Would you like some chocolates?” (Note the plural, which indicates that it would be acceptable to take more than one.) In the “monetary” condition, she asked, “Would you like some chocolates? The cost is one cent each.” Finally, in the “effort” condition, she handed people a stack of pages with random arrangements of printed letters. For every pair of
s
's they found, she said, they could have a Lindt truffle (but they did not have to take one). They could work as long as they wanted, putting in as much or as little effort as they wished. (There were well over fifty pairs of
s
's among all the sheets of letters, and it was very easy to spot them.)

The apparently voracious people in the monetary condition took an average of 30 truffles each. Those in the free condition took a polite average of 1.5. And how do you think effort-as-payment for truffles went over? This group fell somewhere in the middle, but closer to the free condition: our participants took an average of 8.6 truffles each in exchange for finding pairs of
s
's (or an average of about 21 fewer than those in the monetary condition).

These results suggest that effort falls somewhere in the middle of the range. It does not produce the same level of social self-consciousness that free does, but participants did seem to consider the implications of their actions on others when they decided how many truffles to take. We found that when effort is part of the equation, it manages to keep a large part of the social norms, though by no means all of it. As it turns out, the old maxim “Time is money”—or, in our case, “Effort is money”—is not exactly correct. Perhaps a more accurate reframing of our findings would be that effort is somewhere on the spectrum between market and social norms.

The main lesson here is that because exchanges involving effort can maintain social norms to a larger degree relative to financial exchanges, we might want to think about how to get people to switch from paying for services to investing more of their own efforts. As we go about our daily lives, we are often asked to invest effort in recycling, spending time on a neighborhood watch, helping in our kids' schools, volunteering in a soup kitchen, and much more. In each of these cases, one could argue that taking part in these activities makes little economic sense. Why not pay someone to recycle for us, watch our neighborhood, help in our kids' schools, or hand out food in the soup kitchen? Sure, it might be economically inefficient, but investing effort rather than cash might help keep us in the domain of social norms and consequently take into account the welfare of others.

F
OR THE MOST
part in this chapter, I've discussed instances where prices change from something to nothing. Of course, some things that are generally free or are considered a common resource can be relocated into the realm of market forces. For instance, carbon emissions trading is an area where we ought to consider the intersection between social and market norms.
*
“Cap and Trade” is a program of economic incentives designed to encourage industries and companies to pollute less; the less they pollute, the fewer pollution allowances they have to buy. Moreover, if companies don't use all their allowances, they can profit from their cleanliness by selling their extra allowances to companies that pollute more. It's virtue that pays!

However, in light of the experiments described in this chapter (as well as those in Chapter 4), we might want to consider the dark side of putting a price on pollution. If a company can be charged for spewing poisons into the environment, it might well decide, after a cost-benefit analysis, that it can go ahead and pollute a lot more. Once pollution is a market and companies pay for their right to pollute, morality and concern for the environment are nonissues. On the other hand, if pollution is something that cannot be purchased or traded, it would more naturally fall into the domain of social norms.

To be sure, if we want to place pollution under the control of social norms, we can't stand back and hope that people will start caring. We need to make pollution into an easily measurable and observable quantity and get people to pay attention to it and understand its importance. We could, for example, publically post the pollutant amounts of different countries, states, and companies together with their environmental impact. We could include this information on companies' financial statements to their shareholders or maybe force companies to post it on their products, much as we do for nutritional information on packaged food.

I'm not saying that Cap and Trade is necessarily a bad idea, but I do think that when public policy or environmental issues are at stake, our task is to figure out which of the two—social or market norms—will produce the most desirable outcome. In particular, policy makers should be careful not to add market norms that could undermine the social ones.

N
OW THAT WE'VE
learned how social norms get people to care less about their own selfish goals and pay more attention to the welfare of others, you might expect me to propose a brilliant idea for injecting more social norms and civility into the Filene's Basement “Running of the Brides.” I wish I had a solution for getting these women to behave in a more considerate or at least less violent way. But the haunting memories of watching the live event suggest to me that getting a future bride to concentrate on an abstract idea like “other people” as opposed to the concrete reality of a discounted wedding gown might be nearly impossible. (For weeks afterward, I would look into the faces of my female friends and wonder whether they, too, were capable of trampling each other in an abject act of retail lust.)

And why, you might ask, am I so easily giving up on this social science challenge? Because I suspect that for social norms to operate, people cannot be at their most emotionally piqued state. When you're focused, mind and body, on one highly emotional objective—grabbing that wedding dress—it's hard to factor in others' well-being. As we will see in the next chapter, when emotions run high, social norms inevitably get trampled like so many Vera Wang veils.

CHAPTER
6
The Influence of Arousal

Why Hot Is Much Hotter Than We Realize

A
sk most twentysomething male college students whether they would ever attempt unprotected sex and they will quickly recite chapter and verse about the risk of dreaded diseases and pregnancy. Ask them in any dispassionate circumstances—while they are doing homework or listening to a lecture—whether they'd enjoy being spanked, or enjoy sex in a threesome with another man, and they'll wince. No way, they'd tell you. Furthermore, they'd narrow their eyes at you and think, What kind of sicko are you anyhow, asking these questions in the first place?

In 2001, while I was visiting Berkeley for the year, my friend, academic hero, and longtime collaborator George Loewenstein and I invited a few bright students to help us understand the degree to which rational, intelligent people can predict how their attitudes will change when they are in an impassioned state. In order to make this study realistic, we needed to measure the participants' responses while they were smack in the midst of such an emotional state. We could have made our participants feel angry or hungry, frustrated or annoyed. But we preferred to have them experience a pleasurable emotion.

We chose to study decision making under sexual arousal—not because we had kinky predilections ourselves, but because understanding the impact of arousal on behavior might help society grapple with some of its most difficult problems, such as teen pregnancy and the spread of HIV-AIDS. There are sexual motivations everywhere we look, and yet we understand very little about how these influence our decision making.

Moreover, since we wanted to understand whether participants would be able to predict how they would behave in a particular emotional state, the emotion needed to be one that was already quite familiar to them. That made our decision easy. If there's anything predictable and familiar about twentysomething male college students, it's the regularity with which they experience sexual arousal.

R
OY, AN AFFABLE,
studious biology major at Berkeley, is in a sweat—and not over finals. Propped up in the single bed of his darkened dorm room, he's masturbating rapidly with his right hand. With his left, he's using a one-handed keyboard to manipulate a Saran-wrapped laptop computer. As he idles through pictures of buxom naked women lolling around in various erotic poses, his heart pounds ever more loudly in his chest.

As he becomes increasingly excited, Roy adjusts the “arousal meter” on the computer screen upward. As he reaches the bright red “high” zone, a question pops up on the screen:

Could you enjoy sex with someone you hated?

Roy moves his left hand to a scale that ranges from “no” to “yes” and taps his answer. The next question appears: “Would you slip a woman a drug to increase the chance that she would have sex with you?”

Again, Roy selects his answer, and a new question pops up. “Would you always use a condom?”

B
ERKELEY ITSELF IS
a dichotomous place. It was a site of antiestablishment riots in the 1960s, and people in the Bay Area snarkily refer to the famously left-of-center city as the “People's Republic of Berkeley.” But the large campus itself draws a surprisingly conformist population of top-level students. In a survey of incoming freshmen in 2004, only 51.2 percent of the respondents thought of themselves as liberal. More than one-third (36 percent) deemed their views middle-of-the-road, and 12 percent claimed to be conservatives. To my surprise, when I arrived at Berkeley, I found that the students were in general not very wild, rebellious, or likely to take risks.

The ads we posted around Sproul Plaza read as follows: “Wanted: Male research participants, heterosexual, 18 years-plus, for a study on decision making and arousal.” The ad noted that the experimental sessions would demand about an hour of the participants' time, that the participants would be paid $10 per session, and that the experiments could involve sexually arousing material. Those interested in applying could respond to Mike, the research assistant, by e-mail.

For this study, we decided to seek out only men. In terms of sex, their wiring is a lot simpler than that of women (as we concluded after much discussion among ourselves and our assistants, both male and female). A copy of
Playboy
and a darkened room were about all we'd need for a high degree of success.

Another concern was getting the project approved at MIT's Sloan School of Management (where I had my primary appointment). This was an ordeal in itself. Before allowing the research to begin, Dean Richard Schmalensee assigned a committee, consisting mostly of women, to examine the project. This committee had several concerns. What if a participant uncovered repressed memories of sexual abuse as a result of the research? Suppose a participant found that he or she was a sex addict? Their questions seemed unwarranted to me, since any college student with a computer and an Internet connection can get hold of the most graphic pornography imaginable.

Although the business school was stymied by this project, I was fortunate to have a position at MIT's Media Lab as well, and Walter Bender, who was the head of the lab, happily approved the project. I was on my way. But my experience with MIT's Sloan School made it clear that even half a century after Kinsey, and despite its substantial importance, sex is still largely a taboo subject for a study—at least at some institutions.

I
N ANY CASE,
our ads went out; and, college men being what they are, we soon had a long list of hearty fellows awaiting the chance to participate—including Roy.

Roy, in fact, was typical of most of the 25 participants in our study. Born and raised in San Francisco, he was accomplished, intelligent, and kind—the type of kid every prospective mother-in-law dreams of. Roy played Chopin études on the piano and liked to dance to techno music. He had earned straight A's throughout high school, where he was captain of the varsity volleyball team. He sympathized with libertarians and tended to vote Republican. Friendly and amiable, he had a steady girlfriend who he'd been dating for a year. He planned to go to medical school and had a weakness for spicy California-roll sushi and for the salads at Cafe Intermezzo.

Roy met with our student research assistant, Mike, at Strada coffee shop—Berkeley's patio-style percolator for many an intellectual thought, including the idea for the solution to Fermat's last theorem. Mike was slender and tall, with short hair, an artistic air, and an engaging smile.

Mike shook hands with Roy, and they sat down. “Thanks for answering our ad, Roy,” Mike said, pulling out a few sheets of paper and placing them on the table. “First, let's go over the consent forms.”

Mike intoned the ritual decree: The study was about decision making and sexual arousal. Participation was voluntary. Data would be confidential. Participants had the right to contact the committee in charge of protecting the rights of those participating in experiments, and so on.

Roy nodded and nodded. You couldn't find a more agreeable participant.

“You can stop the experiment at any time,” Mike concluded. “Everything understood?”

“Yes,” Roy said. He grabbed a pen and signed. Mike shook his hand.

“Great!” Mike took a cloth bag out of his knapsack. “Here's what's going to happen.” He unwrapped an Apple iBook computer and opened it up. In addition to the standard keyboard, Roy saw a 12-key multicolored keypad.

“It's a specially equipped computer,” Mike explained. “Please use only this keypad to respond.” He touched the keys on the colored pad. “We'll give you a code to enter, and this code will let you start the experiment. During the session, you'll be asked a series of questions to which you can answer on a scale ranging between ‘no' and ‘yes.' If you think you would like the activity described in the question, answer ‘yes,' and if you think you would not, answer ‘no.' Remember that you're being asked to predict how you would behave and what kind of activities you would like when aroused.”

Roy nodded.

“We'll ask you to sit in your bed, and set the computer up on a chair on the left side of your bed, in clear sight and reach of your bed,” Mike went on. “Place the keypad next to you so that you can use it without any difficulty, and be sure you're alone.”

Roy's eyes twinkled a little.

“When you finish with the session, e-mail me and we will meet again, and you'll get your ten bucks.”

Mike didn't tell Roy about the questions themselves. The session started by asking Roy to imagine that he was sexually aroused, and to answer all the questions as he would if he were aroused. One set of questions asked about sexual
preferences. Would he, for example, find women's shoes erotic? Could he imagine being attracted to a 50-year-old woman? Could it be fun to have sex with someone who was extremely fat? Could having sex with someone he hated be enjoyable? Would it be fun to get tied up or to tie someone else up? Could “just kissing” be frustrating?

A second set of questions asked about the likelihood of engaging in immoral behaviors such as date rape. Would Roy tell a woman that he loved her to increase the chance that she would have sex with him? Would he encourage a date to drink to increase the chance that she would have sex with him? Would he keep trying to have sex after a date had said “no”?

A third set of questions asked about Roy's likelihood of engaging in behaviors related to unsafe sex. Does a condom decrease sexual pleasure? Would he always use a condom if he didn't know the sexual history of a new sexual partner? Would he use a condom even if he was afraid that a woman might change her mind while he went to get it?
*

A few days later, having answered the questions in his “cold,” rational state, Roy met again with Mike.

“Those were some interesting questions,” Roy noted.

“Yes, I know,” Mike said coolly. “Kinsey had nothing on us. By the way, we have another set of experimental sessions. Would you be interested in participating again?”

Roy smiled a little, shrugged, and nodded.

Mike shoved a few pages toward him. “This time we're asking you to sign the same consent form, but the next task will be slightly different. The next session will be very much the same as the last one, but this time we want you to get yourself into an excited state by viewing a set of arousing pictures and masturbating. What we want you to do is arouse yourself to a high level, but not to ejaculate. In case you do, though, the computer will be protected.”

Mike pulled out the Apple iBook. This time the keyboard and the screen were covered with a thin layer of Saran wrap.

Roy made a face. “I didn't know computers could get pregnant.”

“Not a chance,” Mike laughed. “This one had its tubes tied. But we like to keep them clean.”

Mike explained that Roy would browse through a series of erotic pictures on the computer to help him get to the right level of arousal; then he would answer the same questions as before.

W
ITHIN THREE MONTHS,
some fine Berkeley undergraduate students had undergone a variety of sessions in different orders. In the set of sessions conducted when they were in a cold, dispassionate state, they predicted what their sexual and moral decisions would be if they were aroused. In the set of sessions conducted when they were in a hot, aroused state, they also predicted their decisions—but this time, since they were actually in the grip of passion, they were presumably more aware of their preferences in that state. When the study was completed, the conclusions were consistent and clear—overwhelmingly clear, frighteningly clear.

In every case, our bright young participants answered the questions very differently when they were aroused from when they were in a “cold” state. Across the 19 questions about sexual preferences, when Roy and all the other participants were aroused they predicted that their desire to engage in a variety of somewhat odd sexual activities would be nearly twice as high as (72 percent higher than) they had predicted when they were cold. For example, the idea of enjoying contact with animals was more than twice as appealing when they were in a state of arousal as when they were in a cold state. In the five questions about their propensity to engage in immoral activities, when they were aroused they predicted their propensity to be more than twice as high as (136 percent higher than) they had predicted in the cold state. Similarly, in the set of questions about using condoms, and despite the warnings that had been hammered into them over the years about the importance of condoms, they were 25 percent more likely in the aroused state than in the cold state to predict that they would forego condoms. In all these cases they failed to predict the influence of arousal on their sexual preferences, morality, and approach to safe sex.

The results showed that when Roy and the other participants were in a cold, rational, superego-driven state, they respected women; they were not particularly attracted to the odd sexual activities we asked them about; they always took the moral high ground; and they expected that they would always use a condom. They thought that they understood themselves, their preferences, and what actions they were capable of. But as it turned out, they completely underestimated their reactions.

No matter how we looked at the numbers, it was clear that the magnitude of underprediction by the participants was substantial. Across the board, they revealed in their unaroused state that they themselves did not know what they were like once aroused. Prevention, protection, conservatism, and morality disappeared completely from the radar screen. They were simply unable to predict the degree to which passion would change them.
*

I
MAGINE WAKING UP
one morning, looking in the mirror, and discovering that someone else—something alien but human—has taken over your body. You're uglier, shorter, hairier; your lips are thinner, your incisors are longer, your nails are filthy, your face is flatter. Two cold, reptilian eyes gaze back at you. You long to smash something, rape someone. You are not you. You are a monster.