Friday, January 23, 2009

Looking good by doing good

You know the feeling where once you become aware of something, you suddenly see that something everywhere you look? I have been having a bit of that for the last few weeks.

Some days back, I added a post on Dan Ariely's book 'Predictably Irrational'. In the post I wondered whether there were other popular (as opposed to technical) books or articles written on this subject. Since then, friends have pointed out multiple articles that talk to this subject. Reading the Economist last week, I found an article where another one of Dan Ariely's fascinating experiments is discussed.

The question Ariely is dealing with here is a question of motivation - why are people happy to do some things for free but would not do them if they were to be paid? There is a great experiment testing this, which the article walks us through. The generic point that Ariely draws is that some activities (like charity) are taken up purely for the social 'points' they earn us. Call it reputation, admiration, character, image, stature, whatever. People are happy to do these things as long as they get some visible enhancement in their reputation. They continue to operate under 'social norms'. However, try to pay these people to do the same thing, and their mindset immediately shifts to the framework of 'market norms'. They start asking themselves the question "is this worth my time?".

There are many implications of this insight. Most directly, trying to provide monetary incentives to people to do charitable work is likely to be not just ineffective, but actually counter-productive. People would end up doing less charity work. Applying a monetary fine for not completing college assignments is likely to increase the rate of incomplete assignments, rather than decrease them. Fascniating, don't you think?

1 comment:

  1. If you want a more comprehensive look at what makes people happy, you might want to look at 'Stumbling on Happiness' by Daniel Gilbert.