Psychology 01 (Nov 08 - Jan 14)

[millionairemind]

The psychology of power
Absolutely
Power corrupts, but it corrupts only those who think they deserve it

Jan 21st 2010
From The Economist print edition
Bridgeman

REPORTS of politicians who have extramarital affairs while complaining about the death of family values, or who use public funding for private gain despite condemning government waste, have become so common in recent years that they hardly seem surprising anymore. Anecdotally, at least, the connection between power and hypocrisy looks obvious.
http://www.economist.com/sciencetechnol ... d=15328544

[Musicwhiz]

Absolute Power corrupts absolutely!

The true test of a man (or woman) is being subject to temptation and power and yet being able to resist it, through force of will and inborn principles alone. This is much harder to do than stated in writing, because EMOTIONS are involved. So these tend to be the people I'd respect most in the world.

[millionairemind]

An excerpt from Sway.

Talk about human irrationality.

“In South Africa, a consumer lending bank wanted to push personal loans to 50,000 of its customers. Working together with a team of economists, the bank crafted several variations on the same basic loan offer letter. The different versions were randomly assigned to recipients and mailed off without the recipients ever knowing that the letter they had received was part of an experiment.

The letters included different interest rates (ranging from 3.25% to 7.75% per month); some featured a comparison to a competitor’s rate, others a giveaway…and still others a photo of either a man or a woman’s pleasant, smiling face.

Now, you’d think that the customer would evaluate the offer based purely on interest rate and the specific terms of the loan…The unexpected effect kicked in with the least relevant variation: the inclusion of a picture of the smiling face in the corner. Men who received a picture of one of four smiling women were much more likely to sign up for the loan than the men who received a picture of a smiling man. The magnitude of this effect is ‘about as much as dropping the interest rate 4.5 percentage points.’”

[mojo_]

An excerpt from Sway.

Talk about human irrationality.

“In South Africa, a consumer lending bank wanted to push personal loans to 50,000 of its customers. Working together with a team of economists, the bank crafted several variations on the same basic loan offer letter....

My experiences with my credit card issuing bank:

1) Got calls from them asking if I want to monetise my credit card. Me: "huh, monetise?" Bank: "Yes, generate cash flows from your card, u know?" Me: "But I don't have any funds in my credit card account mah - how to generate cash?" After a while, I realise they are trying to give me cash as loans against my credit card. Duh! Clever use of euphemisms for loans...

2) Several times, I get cheques in my name with dollar amounts in them. Real cheques that I can cash in. Just that the fine print says I have to pay back as part of credit card payments with interest. Another disguise for selling me loans.

Banks have really gotten too greedy and have to be reined in..

[kennynah]

they call me about credit cards...i say "i have no steady income".... that usually ends the conversation

[millionairemind]

2) Several times, I get cheques in my name with dollar amounts in them. Real cheques that I can cash in. Just that the fine print says I have to pay back as part of credit card payments with interest. Another disguise for selling me loans.

Banks have really gotten too greedy and have to be reined in..

Presumed you got the checks from UOB??? I get one every month.. at first I tot I got some refund somewhere.. then upon closer examination, I realized it was just a scam. Now I just dump it into the trash bin whenever I open this type of letters from UOB.

[mojo_]

Presumed you got the checks from UOB??? I get one every month..

Yup. I get the checks only about once a year. You are definitely a very much more valuable customer than I..

Now I just dump it into the trash bin

Me too, but I tear them to pieces first..

[millionairemind]

Professor Daniel Putler, a former researcher at the U.S. Department of Agriculture, has spent more time thinking about eggs in a year than the rest of us spend in a lifetime. He carefully tracked and studied every aspect of egg sales in southern California. Looking at the data, he found some interesting patterns. Egg sales, for instance, were typically higher during the first week of each month. Not surprisingly, they were abnormally high in the weeks leading up to Easter, only to experience a sharp decline the week after. That was all well and good, but Putler’s next discovery wasn’t just of use to the USDA and Al the grocer. Poring over cash-register data that reflected egg-price fluctuations, Putler identified what is referred to in economics as an “asymmetry.”

Now, traditional economic theory holds that people should react to price fluctuations with equal intensity whether the price moves up or down. If the price goes down a bit, we buy a little more. If the price goes up a bit, we buy a little less.

In other words, economists wouldn’t expect people to be more sensitive to price increases than to price decreases. But what Putler found was that shoppers completely overreacted when prices rose.

It turns out that, when it comes to price increases, egg buyers are a sensitive bunch. If you reduce the price of eggs, consumers buy a little more. But when the price of eggs rises, they cut back their consumption by two and a half times.

Anyone who’s made a shopping list with a budget in mind can tell you how this plays out. If the price drops, we’re mildly pleased. But if we see that the price has gone up since last week, we get an oh no feeling in the pit of our stomachs and decide it’s cereal for breakfast that week instead of scrambled eggs. This feeling of dread over a price increase is disproportionate—or asymmetric—to the satisfaction we feel when we get a good deal.

We experience the pain associated with a loss much more vividly than we do the joy of experiencing a gain. Sensing a loss as a result of the high price, the shoppers can’t help but put the carton back on the shelf.

And it’s not only egg buyers who are affected by the pain of a loss. A group of researchers replicated Putler’s study among orange juice shoppers in Indiana and arrived at the exact same results: Midwest OJ drinkers are just as finicky about price increases as are Los Angeles omelet makers. Regardless of geography and breakfast preferences, losses loom larger than gains.

Putler’s research illuminates a mystery that economists have been grappling with for years. For no apparent logical reason, we overreact to perceived losses.

[winston]

Witnessing Uplifting Behavior May Spur Good Deeds
HealthDay

Sat Feb 13, 11:48 pm ET

SATURDAY, Feb. 13 (HealthDay News) -- Seeing someone else do a good deed appears to inspire you to do the same by making you feel uplifted, new research suggests.

In an experiment, researchers recruited volunteers who watched a "neutral" video clip of scenes from a nature documentary or a clip from "The Oprah Winfrey Show" in which musicians thanked their mentors. The participants then wrote essays about what they watched, were paid for their time and asked to indicate whether they'd want to take part in another study.

Those who saw the Oprah Winfrey clip were more likely to volunteer to take part in another study.

The positive, uplifting emotion that makes people feel good and may inspire them to help others is known as "elevation," the researchers explained in a news release about the experiment from the Association for Psychological Science.

In another experiment, participants watched one of the previous two clips or a third clip from a British comedy. Afterwards, a research assistant said she was having trouble opening a computer file connected to the study, and told the volunteers that they were free to leave, but as they exited she asked the participants if they would be willing to fill out a boring questionnaire for another study.

Volunteers who watched the Oprah Winfrey clip spent almost twice as long helping the assistant as those who watched the other clips, the researchers noted.

The study authors concluded that "by eliciting elevation, even brief exposure to other individuals' prosocial behavior motivates altruism, thus potentially providing an avenue for increasing the general level of prosociality in society."

The findings are to be published in an upcoming issue of the journal Psychological Science.

http://news.yahoo.com/s/hsn/witnessingu ... rgooddeeds

[millionairemind]

I have read about these type of studies so often that nobody is going to con me into paying $100 for a bottle of wine.

Our minds concoct lies about Y a wine tastes good. However, in double blind experiments, wine tasters (supposedly experts from wine clubs) have chosen a $10 wine (in a $90 bottle) over a $90 wine( in a $10 bottle).

When the price of the wine is removed, they actually prefer the $10 wine

Study: $90 wine tastes better than the same wine at $10
by Stephen Shankland

In a study that could make marketing managers and salespeople rub their hands with glee, scientists have used brain-scanning technology to shed new light on the old adage, "You get what you pay for."

Researchers from the California Institute of Technology and Stanford's business school have directly seen that the sensation of pleasantness that people experience when tasting wine is linked directly to its price. And that's true even when, unbeknownst to the test subjects, it's exactly the same Cabernet Sauvignon with a dramatically different price tag.
Specifically, the researchers found that with the higher priced wines, more blood and oxygen is sent to a part of the brain called the medial orbitofrontal cortex, whose activity reflects pleasure. Brain scanning using a method called functional magnetic resonance imaging (FMRI) showed evidence for the researchers' hypothesis that "changes in the price of a product can influence neural computations associated with experienced pleasantness," they said.

The study, by Hilke Plassmann, John O'Doherty, Baba Shiv, and Antonio Rangel, was published this week in the Proceedings of the National Academy of Sciences.

This chart shows that people ranked taste of a $45 wine higher than the same wine priced at $5, and the same for a different wine marked $90 and $10.

The research, along with other studies the authors allude to, are putting a serious dent in economists' notions that experienced pleasantness of a product is based on its intrinsic qualities.
"Contrary to the basic assumptions of economics, several studies have provided behavioral evidence that marketing actions can successfully affect experienced pleasantness by manipulating nonintrinsic attributes of goods. For example, knowledge of a beer's ingredients and brand can affect reported taste quality, and the reported enjoyment of a film is influenced by expectations about its quality," the researchers said. "Even more intriguingly, changing the price at which an energy drink is purchased can influence the ability to solve puzzles."