Interaction Effects

In a study , 1017 respondents were asked their opinion about the Monetary Control Bill (MCB). About 10% of the respondents tended to support the bill and about 5% of the respondents tended to oppose the bill. If they claim to support or oppose the bill, you would assume that they also know what the bill is about. However, they can't know what the bill is about since the bill is fictitious. The authors made it up just for the experiment. Essentially, respondents claimed to know about something that was fictitious. The tendency to "overclaim", or to claim to know more than you do, has been found in several studies. For example, people claim to know about fictitious topics in science  and in finance.  People tend to overclaim if they think that they are aware of the topic.  For example, one study finds that respondents are more likely to claim to be familiar with non-existent consumer brands, for which there was broad knowledge to refer to. He finds that peopl...

Colonoscopy is a screening procedure commonly used to identify Colorectal cancer. People could be reluctant to undergo this procedure because it is painful. A study by Redelmeier, Katz, and Kahneman ran an experiment to see if there was a possibility to reduce a patient's perception of how painful the Colonoscopy procedure was. If you can't find the link between Colonoscopy and the title of this article,  wait till the end.  Outpatients who would undergo the procedure between November 1994 and December 1995 in a particular hospital, were part of the study. Patients could receive either the Standard care or the Modified care. The Standard care was the standard procedure used by the Hospital. The modified care extended the duration of the standard procedure by about 3 minutes extra. In the extended duration, the tip of the Colonoscope (the instrument used), remained inside the person's body although it didn't function. The extended duration was less painful than the...

Can renaming "Zucchini Cookies" to "Grandma’s Zucchini Cookies" change how people perceive it?  A study  decided to test this in a 6-week field study at the Bevier Cafeteria at the University of Illinois at Urbana-Champaign. They chose 6 products that were offered twice a week and found descriptive labels for them. The products chosen were as following:  Traditional Cajun Red Beans with Rice (vs. Red Beans with Rice), Succulent Italian Seafood Filet (vs. Seafood Filet), Tender Grilled Chicken (vs. Grilled Chicken), Homestyle Chicken Parmesan (vs. Chicken Parmesan), Satin Chocolate Pudding (vs. Chocolate Pudding), and Grandma’s Zucchini Cookies (vs. Zucchini Cookies). On Tuesdays and Fridays, 2 of the items were presented with their regular name, 2 of them with a descriptive label, and 2 of them were not presented. In weeks 2 and 3, the items and conditions were systematically rotated. In weeks 4 through 6, the rotation repeated. Each item was ava...

Can a risk-averse sports fan bet on his opponent to hedge his happiness? In a theoretical paper, Stemmet models the happiness of a sports fan as a function of opposition strength, tournament situation, quality of the game, and expected result of the game. The results of the paper suggest that people who bet on the opponent and face an unexpected loss are happier than if they hadn't done so. However, the happiness is lower if a person bets on the opponent and the team that he supports has an unexpected or expected win. The authors suggest that if people are risk averse and are more affected by a loss than by a gain, then they will choose to hedge their happiness. Betting on the opponent can be looked at as an either here or there situation. The fan is able to mitigate risk and remain happy(or at least not unhappy) regardless of the outcome of the game. However, this strategy is not applicable to everyone.  For many fans,  it would be considered disloyalty to...

When considering the factors affecting brand choice, Ambiguity Aversion could potentially be an important one. Ambiguity aversion refers to the behavior of individuals who show a higher preference for lotteries where the probabilities are known than for those with unknown probabilities. If you carry your own toilet paper to the toilet because you are afraid there might not be any, then you are ambiguity averse (as opposed to risk averse) because you don't know the probability of missing toilet paper.  An interesting study  (MWX, hereafter) argue that ambiguity aversion makes consumers more inclined to choose established brands. They suggest that if people have subjective beliefs of the choice described with precise probabilities and ambiguous probabilities, similar beliefs should arise by a choice between two brands that vary in terms of how people perceive the quality of the brands. They asked participants to choose between the following lotteries: Lottery A: R...

The answer to the question in the title is in the affirmative. Before you begin to question my judgment I should say that I have research to back this claim. In a study, participants were visited at home for a survey. The participants consisted of family dyads, romantic couples, and friendship dyads.  Dyad members knew each other, on average, for 16 years. They were given a booklet containing 30 products with the value of each product being around 20 euros. These products were selected based on some pretesting and were equally attractive to both genders. They were first asked to select 10 products that they would like to receive as a gift and then they were asked to select 10 products that they thought their relative/partner/friend would like to receive. The quality of gift selection was calculated for each participant as the number of gifts they chose, that also appeared on the list of the counterpart. This ranged from 0 to 10. They results of the study finds that women a...

It is well documented that poor people have poor well-being. Children who experience poverty have lower rates of school completion and lower cognitive ability than others. While some theories claim that the lower cognitive ability of the poor is due to lower levels of formal education, others believe that the characteristics of the poor people are at play. A study by Mani, Mullainathan, Shafir and Zhao (2012) takes a different approach and suggest that a sense of scarcity of money leaves the poor with fewer cognitive resources to guide their action. In a lab experiment, they found that when people with lower incomes were induced to think about their daily financial troubles, they performed much worse on subsequent tasks measuring cognitive ability, than those who were not induced to think about financial troubles. For people with higher incomes, however, inducing thoughts of financial scarcity had no effect. While the lab study is fascinating, a quasi-experimenta...

In the Movie Passengers, two passengers on a spaceship, heading to a new planet are in a discussion. The girl asks the guy why he gave up his life on Earth to begin a new life on a new planet. The man replies that he is a mechanic and that on Earth, if anything breaks, people replace it rather than repair it. A life on a new planet would allow him to use his skills to repair things. Indeed, people are increasingly choosing to replace rather than repair. For several products, it is easier and cheaper to replace it than to repair it. While this is true for items ranging from clothes to smartphones, it is still not true for items like cars. Given the high Divorce rates, I'm guessing replacing your spouse is also increasingly becoming a preferred choice. Apparently, in the future, they would be able to replace entire organs with an artificial organ printed using a 3D printer. The first negative consequence of this trend is a falling demand for careers that involve repairs....

Some Indians think that Indians are often late and traffic is usually the  excuse. A G reek  friend of mine says Greek people are known for their tardiness and an unexpected visit from a relative is often the excuse. I find it hard to believe this one but my Russian friend says that Russians are often late because it is bullshit to be early. These are narratives from people who base their opinion based on personal experience, the validity of which cannot be guaranteed. However, there are more rigorous studies that indeed find cross-cultural differences in punctuality.      " Participacion   Ciudadana ", the civic group behind a campaign in Ecuador, reckons that lateness costs Ecuador $724m (or 4.3% of GDP) each year (Cabral & Pacheco-de-Almeida , 2006).  Given the importance of punctuality in every aspect of life, it is important to look at the factors affecting  punctuality and to identify situations that are conducive to punctual ...