This clip with Dan Ariely telling off a dentist who tried to sell him on a more expensive item is classic. Would that we all behaved in such a manner, no? The problem when you interact with a particular set of professionals, in particular in healthcare, the information asymmetry is such that it is very difficult for you to make an informed choice as a consumer. I’ve had an experience very similar to Ariely with dentists.
The problem here though that is that dentists are professionals. In other words, they should be motivated by something other than the profit motive. Ergo, we (the public) confer upon the profession licensing for exclusive services. The problem is that professionals are not immune from incentives. On the conscious level it seems that professionals generally do perform services without the profit motive in mind (e.g., dentists and doctors encourage your toward good health).* The problem is that on the unconscious and implicit level is where subtle biases and preferences come to the fore.
Naturally professionals don’t want to admit that they have biases. I’ve listened to Dr. Thomas P. Stossel dismiss the possibility that gifts and perks by pharmaceutical companies might have an ...
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I just got back from a European trip, and I have to say I did not miss tipping. I especially appreciated not having to do the song & dance typical of larger groups in sit-down restaurants in the USA where you figure out how much you’re going to tip on a communal basis, when everyone has different tipping set points and perceptions of service and such. The money is less of an issue than the extra wasted time at the end of a meal & drinks which are spent on the terms of calculation rather than more conventional conviviality. In fact now that I think about it way too much time in my life has been spent discussing the etiquette of tipping, often outside of a situation where people are going to have to tip imminently. I thought about this after seeing this post in The Atlantic on tipping. One correspondent observes:
I lived in Japan for a while. There is no tipping there, and it works great. If we could be like Japan, I’d be all for it. However, I don’t think we’d be like Japan. Anytime I have ever eaten somewhere that does not practice tipping, service has been abysmal. Customers herded through like cattle, dishes brought out late, then diners rushed through them, eyes rolled, etc. We just do not have the service culture that would allow us to disconnect pay from performance and continue to expect the same kind of service.
The point about national culture is well taken. I experienced some bad service in Italy and Finland, but the quality of badness was very different, in keeping what with you’d expect from the respective national cultures (though in general I experienced service as good as in the states in both places).* But the empirical observation about American restaurants without tipping having lesser service suffers from sampling bias. Establishments which don’t have tipping are generally lower-end, verging on cafeterias. So it’s not an apples to apples comparison. A better one would be looking at higher end restaurants which have mandatory gratuities for large groups vs. those which do not. Even here you have the peculiar distortion of the larger group, which can often be more difficult for a server to manage.
Of course one’s perspective on this probably varies by the amount of disposable income one has. If you don’t have much disposable income the small but repeated investments of time & energy which go into tipping might be worthwhile if you can manage to pay less than you would otherwise. If you have a fair amount of disposable income the marginal potential savings introduced by greater price variation which you can control at the cost of time & energy needed may not be worth it.
* I had to bargain very hard with a Finnish server on whether I could handle Indian levels of spiciness. This was obviously a well rehearsed conversation on her part, but I thought she should have updated her priors in my case. The lighting was dim, but not that dim. Usually American servers at Indian restaurants aren’t too resistant when I assert I can handle high levels of spice.
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Earlier this year, John Tierney reviewed several studies on how delaying gratification makes us feel better in the short term by preventing guilt but makes us feel more miserable in the long term by causing regret over missed opportunities. I added my two cents here, just to note that this sounds like part of the Greg Clark story about recent genetic change in the commercial races that adapted them to the emerging mercantile societies they found themselves in. What I had in mind was the delaying of vice — investing a dollar today rather than splurging, moderating the amount of drink or sweets you enjoy, and so on.
But now Tierney has another review of related studies which show that we delay gratification even for what should be guilt-free pleasures like redeeming a gift card, using frequent flier miles, and visiting the landmarks in your local area. And don’t we all have enjoyable books and DVDs we’ve been putting off? After indulging in these cases, there is no potential bankruptcy, no hangover, and no tooth decay — so why do we indiscriminately lump them in with genuine vices and put off indulging in them? Obviously this tendency too is a feature of agrarian or industrial groups — hunter-gatherers would never leave gift cards lying around in their drawers.
It must be because of how recent the change toward delaying gratification has been. Given enough time, we might evolve a specialized module for delaying gratification in vices and another module for doing so in guilt-free pleasures, which would be better than where we are now. But when our genetic response to a change is abrupt, typically we have broad-brush solutions that take care of the intended target but also leave plenty of collateral damage. Over time our solutions get smarter, but it takes awhile. Just look at how crude the responses to malaria are.
We see this domain-general taste for (or aversion of) risk in other areas. People who lead more risky lifestyles buy much less insurance than people who lead cautious lifestyles. Those who ride motorcycles without helmets would be richer and more likely to pass on their genes if they bought a lot of insurance, while those who play it safe would be richer by not buying all that superfluous insurance. Instead, daredevils are daredevils all the way — including a contempt for insurance.
This casts doubt on how easy it is to change our behavior so that we no longer postpone our indulgence in guilt-free pleasures. Because we have a domain-general delay of gratification, it will still just feel wrong. You can also argue the logic of buying lots of insurance to the motorcyclist who rides without a helmet, but that won’t change his mind because his tastes for risk is across-the-board.
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