Behavioural economist to use grant for further research into selective attention and economic decisions
Behavioural economist Joël van der Weele tries to unravel the interplay between psychological stimuli and economic decision-making. Having obtained a Vidi research grant, he will now zoom in on the role of 'wilful ignorance'. ‘There is supply as well as demand for ignorance.’
People aren’t all that bad. When given the option to divide €10 in two equal parts for themselves and someone else, or to keep €6 and give the other nothing, a majority of people will choose the first option. The outcome of this ‘dictator game’, published in the mid-eighties by US scientists, surprised many economists. ‘Around 75% of the people turn out willing to sacrifice money to help others. This doesn’t fit with the standard formulas in economics, in which profit maximisation is the purpose of any transaction’, explains Joël van der Weele, behavioural economist with the University of Amsterdam’s Center for Research in Experimental Economics and political Decision-making.
Heads in the sand
That’s the good news. When things become a bit more complicated, people are tempted to look the other way and ignore negative consequences of their economic choices, other research later showed. In a similar experiment, in which the choices made were not made public and where several scenarios were possible, participants could check beforehand how much the other would get if they decided to keep a certain amount of money for themselves. This time, participants proved much less socially responsible: only half of them took a look at the different scenarios. The barrier was small but the consequences large: the amount of money given away fell by thirtyto fifty percent.
Van der Weele and his team investigate why people try to remain ignorant. Ignorance enables them to keep money without damaging their self-image, they concluded in recently published research. The parallels with real life are numerous. ‘In many situations, we can look for, try to ignore or even actively avoid information. For example the question whether or not to eat meat. Would you watch that discomforting documentary or not? Would you read that highly informative book or not?’ asks Van der Weele. He has decided to eat little meat, which he buys at an organic butcher.
Supply and demand for ignorance
The kind of information a person, but also a society wants to have depends very much on the consequences of being informed, says Van der Weele. ‘There is supply as well as demand for ignorance.’
Knowing certain things, one might be obliged to undertake action or at least to consider doing so, which is not necessarily pleasant or favourable. On top of that are the economic consequences. Inside the lab, ignorance triggers a drop in prosocial behaviour, but what happens outside? Van der Weele points to climate change and energy. ‘One might have to consider buying a more expensive car. Or - as a society - to produce energy in a different way.’
The ‘supply of ignorance’ comes in varying degrees, ranging from giving one-sided information to obstructing information to spreading disinformation. Those receiving the information – for example around 300,000 teachers in the US who were sent ‘Why Scientists Disagree about Global Warming’, a book published by the Heartland Institute thinktank of climate change sceptics – must decide whether or not they read it, believe it and act upon it.
Ethical products and the development of social norms related to sustainable consumption
How does information travel? What does the receiver do with it? How does this impact demand?
Thanks to the €800,000 grant awarded to him in May by the Netherlands Organisation for Scientific Research (NWO), Van der Weele can further investigate issues like these. For the next three to four years, along with a PhD-student and a post-doc researcher, he will study the consequences of selective attention for markets in ethical products as well as the development of social norms related to sustainable consumption.
For example, demand for a product will usually decline as its price rises and vice versa. Earlier research by Van Weele seems to indicate that if socially responsible products, such as organic meat, become cheaper, people are more responsive to negative information regarding the cheap alternatives. ‘We’re going to study price-elasticity in a very concrete manner: how do changes in price of ethical products impact people’s willingness to search or accept information?’
From the lab to the field
For years, Van der Weele has done only laboratory research. Soon, he will also be doing field experiments. Working together with a company, offering barbeque meat packs online - including the option to find out the origins of the meat with a single mouse click - he will study the impact of the different factors on buyers’ behaviour.
Van der Weele will also step up his lab research, conducting more complex experiments, for example into the way information is being treated and transmitted within groups. In his view, lab and field research each have specific advantages: ‘Inside the lab, you can create your own world with your own rules and watch how people react to it - is this what I had expected?’
Outside, it is difficult to monitor what kind of information people receive and whether they do anything with it. ‘From a conceptual point of view, transferring experiments to outside the lab may be a little less exciting: one is less focused on how certain behaviour might fit in a theory or could be explained. But the results can be very interesting to use in practice.’
Presenting information effectively
After years of research, Van der Weele remains curious as to why people exhibit good and bad behaviour. Ultimately, he hopes that investigating how to present information in order to have most impact will result in more sustainable consumption. There is much to gain for corporations and politicians, he feels, but also for charities if they know how to present their information effectively. ‘In the end, all major issues worldwide depend on the way how people and groups of people make decisions.’