Strategy. Innovation. Brand.
Cherry Creek Parks Itself
Sure, you can park here.
The owners of Cherry Creek shopping mall recently shifted from social norms to market norms. They may have screwed themselves in the process.
Cherry Creek is a huge shopping mall filled with upscale stores in a trendy neighborhood in Denver. The neighborhood is a traditional shopping district – filled with boutiques, salon, coffee shops, and restaurants — that predated the mall. The neighborhood offers on-street, metered parking. When the mall opened, it offered 5,100 free covered parking spaces.
Being good citizens, we Denverites treated the covered parking spaces as a social good governed by social norms. We knew that the parking spaces were intended for people who were shopping in the mall, not wandering about the neighborhood. I’m sure that some people cheated but, by and large, we honored the social norms.
A few weeks ago, the mall started charging for parking. It now costs about the same to park in the covered lots as it does to park on the street in the neighborhood. There’s one exception: you get the first hour free at the mall.
I used to consider the mall parking a social good. But now that the rules have changed, I consider it a commercial product. We’ve shifted from social norms to market norms. If it’s going to cost about the same to park on the street or in the mall, I think I’ll park in the mall. It’s covered and convenient. And it’s a commercial product, so I won’t have a guilty conscience.
My prediction: the change to market norms will worsen the mall’s parking problems. More non-mall shoppers will feel justified to pay the fee, park in the covered lots, and then wander the neighborhood. They’ve paid for the parking so they can use it any way they want.
In his book, Predictably Irrational, Dan Ariely stresses that people will do more, work harder, and behave better when social norms are in force as compared to market norms. Ariely reports on an experiment performed at St. Thomas University. Researchers asked students to do a rather mind-numbing task on a computer for five minutes. Students were divided into three groups. The first group received a payment of five dollars. The second group got a payment of 50 cents. The students in the third group were asked to perform the task “as a favor” to the researchers.
Who performed best? The students who received five dollars completed 159 transactions. Those who received fifty cents completed 101 transactions. And those who did it for nothing completed 168 transactions. In this example, money decreases performance rather than increasing it. As Ariely notes, “Money, as it turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.”
Ariely also tells the story of a nursery school that wanted to motivate parents to pick up their kids on time. The owners of the school used social norms to enforce the policy. Parents were guided by their conscience; they were ashamed to be late.
Most parents complied, but a few didn’t. The nursery school then shifted to market norms – charging a fine for late pick-ups. What happened? The number of late pick-ups increased sharply. With fines in place, your conscience no longer guides you. Your wallet does. You can literally buy time.
Tellingly, when the nursery school then removed the fine, the parents’ behavior didn’t change much. Ariely draws a larger point from this – once you change form social norms to market norms, you can’t go back. Ariely writes, “Once the bloom is off the rose – once a social norm is trumped by a market norm – it will rarely return.”
What does all this mean for Cherry Creek shopping mall? I suspect that non-compliant parking will increase. People will no longer be guided by their conscience. More prosaic concerns will prevail. People can now buy time, convenience, and space. I suspect the mall managers will reverse their decision at some point. Unfortunately, it won’t matter much.
It’s too bad the mall managers didn’t read Dan Ariely’s book. They could have saved themselves a huge headache. However, if some of my other predictions come true, we won’t need parking lots much longer.
Trumping The Press
I need my skeptical spectacles.
Is Donald Trump vilifying the press or playing the press?
Take a recent example: someone leaked a draft memo to the Washington Post suggesting that the government will activate 100,000 National Guard troops to arrest illegal aliens. The Post printed the story and the reactions from both sides were predictable. The left was outraged that the government might do such a thing. The right pitched a hissy fit over leaks.
But here’s another way to interpret the story. The Trump administration wants to rid the country of approximately 11 million illegal aliens. Deporting them all would be a difficult, expensive, and lengthy task. So here’s another way: scare at least some of them into leaving on their own. The National Guard story – though false – undoubtedly started rumors in immigrant neighborhoods that the Feds were about to launch massive sweeps. Better to depart sooner rather than later.
Seen in this light, the Trump administration wins in two ways. First, the story sows fear in immigrant communities and may lead to “self-deportations”. Second, the administration continues to build the narrative that the media promotes fake news and is the enemy of the people.
Another tactic to control the conversation is what academics call availability cascades. We humans estimate how risky something is based on information that’s available to us. An availability cascade makes a cascade of information – about one and only one topic – readily available to us.
The Ebola scare of 2014 provides a good example. Somebody gets sick with a dread disease. The press writes vivid stories about the illness and makes grim images easily available to us. It’s top of mind. Then people push the government to “do something” about the menace. The press writes about that. Then the government actually does something. The press writes about that. Then people protest what the government has done. The press writes about that. Soon, the entire world seems to be chattering about Ebola. If everybody’s talking about it, it must be dangerous.
The Trump administration creates an availability cascade when it lures the press into writing more about Islamic terrorism. The administration has accused the press of underreporting terrorist incidents. In response, the press has written numerous articles pointing out just how many stories they’ve written on terrorist incidents. The net effect? Terrorism is in the headlines every day. Everybody is talking about it. It must be dangerous.
Even fake news can help keep availability cascades in the headlines. The administration makes a far-fetched claim and the press naturally wants to set the record straight. By doing so, the press adds fuel to the availability fire. The story lingers on. As long as the press plays along, the administration will keep creating alternative facts. Think of it as the media equivalent of rope-a-dope.
Trump’s obsession with himself creates another availability cascade. Trump regularly talks about himself and his accomplishments – how smart he is, how many electoral votes he won, and so on. He often repeats himself; the news is no longer new. Yet the press keeps writing about it. Apparently, they want to show how self-obsessed he is. But the practical effect is that Trump dominates the headlines very day. If everybody is chattering about him, he must be very powerful.
Bernard Cohen wrote that, “The press may not be successful … in telling people what to think, but it is stunningly successful in telling them what to think about.” The Trump administration is using the press to frame the discussion and tell us what to think about. Perhaps it’s time for the press to change the subject.
Factory-Installed Biases
Born this way.
In my critical thinking class, we investigate a couple of dozen cognitive biases — fallacies in the way our brains process information and reach decisions. These include the confirmation bias, the availability bias, the survivorship bias, and many more. I call these factory-installed biases – we’re born this way.
But we haven’t asked the question behind the biases: why are we born that way? What’s the point of thinking fallaciously? From an evolutionary perspective, why haven’t these biases been bred out of us? After all, what’s the benefit of being born with, say, the confirmation bias?
Elizabeth Kolbert has just published an interesting article in The New Yorker that helps answer some of these questions. (Click here). The article reviews three new books about how we think:
- The Enigma of Reason by Hugo Mercier and Dan Sperber
- The Knowledge Illusion: Why We Never Think Alone by Steve Sloman and Philip Fernbach
- Denying To The Grave: Why We Ignore The Facts That Will Save Us by Jack Gorman and Sara Gorman
Kolbert writes that the basic idea that ties these books together is sociability as opposed to logic. Our brains didn’t evolve to be logical. They evolved to help us be more sociable. Here’s how Kolbert explains it:
“Humans’ biggest advantage over other species is our ability to coöperate. Coöperation is difficult to establish and almost as difficult to sustain. For any individual, freeloading is always the best course of action. Reason developed not to enable us to solve abstract, logical problems or even to help us draw conclusions from unfamiliar data; rather, it developed to resolve the problems posed by living in collaborative groups.”
So, the confirmation bias, for instance, doesn’t help us make good, logical decisions but it does help us cooperate with others. If you say something that confirms what I already believe, I’ll accept your wisdom and think more highly of you. This helps us confirm our alliance to each other and unifies our group. I know I can trust you because you see the world the same way I do.
If, on the other hand, someone in another group says something that disconfirms my belief, I know the she doesn’t agree with me. She doesn’t see the world the same way I do. I don’t see this as a logical challenge but as a social challenge. I doubt that I can work effectively with her. Rather than checking my facts, I check her off my list of trusted cooperators. An us-versus-them dynamic develops, which solidifies cooperation in my group.
Mercier and Sperber, in fact, change the name of the confirmation bias to the “myside bias”. I cooperate with my side. I don’t cooperate with people who don’t confirm my side.
Why wouldn’t the confirmation/myside bias have gone away? Kolbert quotes Mercier and Sperber: ““This is one of many cases in which the environment changed too quickly for natural selection to catch up.” All we have to do is wait 1,000 generations or so. Or maybe we can program artificial intelligence to solve the problem.
Emotions And Critical Thinking
My emotions are telling me something.
Let’s say you’re about to give an important speech to a large audience. You’re nervous and your palms start sweating. Which of the following statements is true?
- Your brain is nervous and communicates to your palms, telling them to sweat.
- Your body is nervous and uses sweaty palms to communicate to the brain, telling it to be prepared.
I never really thought about this before I started teaching critical thinking. However, if you had asked me, I would have guessed that the first statement is right. Over the past several years, I’ve switched my position. Today, I think that the second statement is much more likely to be correct.
Each time I teach critical thinking, some students tell me that they’ve seen the light. From now on, they will ignore their emotions and make decisions based solely on logic and critical thinking. They will emulate Mr. Spock on Star Trek. In my opinion, that’s the wrong thing to do.
Our emotions are a source of information. They tell us something. What they tell us is not always clear. Further, it’s not always correct. But they are worth listening to. In fact, I now think of intuition as the body communicating to the brain, through mechanisms like sweaty palms, shallow breathing, shortness of breath, and so on. Our bodies sense our surroundings and communicate information to the brain.
According to Susan David, a professor at Harvard, our emotions can help us clarify our values – but only if we listen to them. In a recent HBR Management Tip of The Day, she writes: “Our emotions are signals that can give us data about what is important to us, but only if we pay attention. Next time you feel emotional at work, take a step back and consider what it’s telling you.” (Literally taking a step back can help you see your options more clearly, too).
She then goes on to explain how emotions can help us understand our core priorities. She suggests that we can’t get to those core priorities solely by thinking – we need to tune in to our emotions. The Heath brothers, in their book, Decisive, also emphasize the need to identify core priorities and offer some tips on how to do it. Between David and the Heaths, you can identify your priorities and learn ways to focus on them.
I’d suggest that you treat your emotions as just another information source. Treat the information that comes through the “emotion channel” just the same as any other information. Evaluate it in the same way as any other piece of information, using the same go-to questions and evaluation processes. Your emotions may be right or they may be wrong. But they’re always worth listening to.
You can find Susan David’s tip of the day here. (The tip was published on February 9, 2017 – just scroll back to that date). You can also find her longer article in HBR here.
You Too Can Be A Revered Leader!
You too can be a revered leader.
I just spotted this article on Inc. magazine’s website:
Want to Be A Revered Leader? Here’s How The 25 Most Admired CEOs Win The Hearts of Their Employees.
The article’s subhead is: “America’s 25 most admired CEOs have earned the respect of their people. Here’s how you can too.”
Does this sound familiar? It’s a good example of the survivorship fallacy. (See also here and here). The 25 CEOs selected for the article “survived” a selection process. The author then highlights the common behaviors among the 25 leaders. The implication is that — if you behave the same way — you too will become a revered leader.
Is it true? Well, think about the hundreds of CEOs who didn’t survive the selection process. I suspect that many of the unselected CEOs behave in ways that are similar to the 25 selectees. But the unselected CEOs didn’t become revered leaders. Why not? Hard to say …precisely because we’re not studying them. It’s not at all clear to me that I will become a revered leader if I behave like the 25 selectees. In fact, the reverse my be true — people may think that I’m being inauthentic and lose respect for me.
A better research method would be to select 25 leaders who are “revered” and compare them to 25 leaders who are not “revered”. (Defining what “revered” means will be slippery). By selecting two groups, we have some basis for comparison and contrast. This can often lead to deeper insights.
As it stands, the Inc. article reminds me of the book for teenagers called How To Be Popular. It’s cute but not very meaningful.
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