Archive for the ‘Behavioral Economics’ Category

NPR Pledge Drives

March 17, 2011

So, NPR was having one of their many pledge drives while I was driving to Boone yesterday.  A few pledge drives back or maybe longer they were having a pledge drive where they weren’t giving anything away.  The shtick was something like, “get what you’re paying for.”  They were saying things like, “we know that you are smart people and you don’t need this carrot (a prize drawing) to get you to do what you ought to be doing anyway which is donating if you’re listening.”   I listened for a while and ultimately did not donate.  The next pledge drive came up and they were back to giving away prizes (presumably because there weren’t enough takers on the no prize pledge) and the drawing was for an ipad.  I pledged, but ultimately did not win the ipad.

When I heard this pledge drive, I started thinking about the differences in those two times.  What made me pledge?  What made me not pledge?  Here’s the thing.  It’s not about the ipad.  It’s about the economic justification narrative that I need in order to live within the confines of our cultural narrative which is economically based.   Here’s what happens to me when NPR asks for money:

They tell me I’m listening so I should give.  I begin to think about the service they are providing and several things flash almost imperceptibly through my mind.  First I think about their public funding and as a result of paying taxes, I feel that I have already given a small amount to NPR (I do understand that this minuscule amount is absolutely insufficient, yet there is a deficit of having given present in my mind).  Second, I think about the service and the other ways that I might acquire this service.  I could listen to other stations for free right now.  I could get all of this information for free on their website or many other websites for that matter.

I compute a micro cost-benefit-analysis in my mind in the space of seconds.  (Our minds are awesome!)

In our culture, we are taught to make the best economic decision possible and with the justification narrative provided by NPR (you’re listening now and so should pay), I don’t quite get the narrative I need. This is why the ipad is so useful.  I actually want to give to NPR, but I need to be able to justify it and the opportunity of winning the ipad offsets the opportunity cost of giving.  It provides one of a variety of economic justification narratives that I need in order to donate.

I think a better justification narrative would look something like this:

yeah, you could change the station.  yeah, you could get this online for free.  But, if you change the station, your quality of life will be lowered because the programming is fluff and doesn’t provide you with the valuable content here.  Further, if you have to go online to look all this up, it’ll take a lot of time.  We are saving you time by providing this information during your drive.

This culture believes that time is something you can make and lose and buy.  I think that is where NPR should try to capitalize.

I’m gonna say something that feels a bit taboo here among NPR fans.  Why don’t they just advertise?  Advertising doesn’t necessarily conflict content.  And, really, they advertise already.  “This show is sponsored by Big Ass Law Firm in Winston Salem.”

*I’d bet $100 bucks that the pledge drive with the ipad following the pledge drive with no prize brought in more money than other pledge drives with prizes.  The absence of the prize in the first made the prize in the second seem more valuable than a typical prize pledge drive.

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Wedding Shower

March 7, 2011

So, yesterday I was at a wedding shower with a whole slew of crafty women.  Brenda was there and had made this cheese knife wrapped in metal wire and beads.  It was a knife that was discontinued when the airlines stopped serving food with actual silverware.  Anyway, she had adorned it with gens and was giving it as a gift to the couple.

I asked her about her experiences making these things and she said she adored making them; they really brought her a lot of happiness and joy to create.  She had made about 20 sets and had given many away as Christmas gifts.  She also had some in Phyllis’s store and had listed them on ebay and etsy to sell.  She had yet to sell any of them.  She said that Phyllis kept telling her that people were “looking” but no one had bought them yet.  She was obviously frustrated that none of them had sold.

Brenda is a retiree who can afford to “take the loss” on creating these items.  That is, the material resources required are not beyond her capability of absorbing.  I asked her why she was selling them.  Her first response was that she wanted to get rich.  She was joking of course.  We all want to get rich with any of our activities.  Then she said she was trying to get her money out of them.  I asked her if she might be trying to sell them as a justification for making them.  She said absolutely.  She enjoys making them.  They cost her something.  She’s trying to offset the negative financial impact of this behavior by selling them and she’s frustrated that it’s not working.

What will happen?  Most likely, she’ll eventually stop making them as they continue to not sell and as her need for the economic justification narrative increases.  She simply won’t be able to justify this behavior.*  I hope that my work will help relieve the pressure for the economic justification narrative with respect to arts and crafts behaviors.  As we take a deeper look at the social, psychological and physiological (yes, I’m talking biology) benefits of arts and crafts behaviors, we will be gin to see that these are actually sustaining behaviors and that the need for the economic justification narrative that disincentives these behaviors is damaging in all three realms.

More about these three realms another time.

I, too, had engaged my crafty nature in creating shower gifts for the couple.  I had created this black ladder back chair with gold leafing and a woven seat bottom made of neckties (which amazingly, I failed to photograph!).  It’s the second chair I had woven a tie bottom for and I really liked it.  The first person to see it was John.  He immediately said I should sell them.  Then, when the gift was unveiled, several people in the room also mentioned how I should sell them.  This always happens, was utterly anticipated, and not at all out of the ordinary.  A few things about it struck me though.

1.  Brenda and Jan did not mention selling the items.  This is interesting because they are determined crafters who could have made the item.  I don’t think that’s why they didn’t mention selling the item though.  I see lots of wonderful crafts and I never say, “you should sell that.”  I think it’s partially,”not-invented-here bias” that Dan Ariely talks about in Chapter 4 of The Upside of Irrationality, sort of a natural envy or something.  But, I also think there’s something deeper going on.  It’s like we’re engaged in this crafting and then we have the economic justification narrative deficit and then we try to sell the items to justify it and then we fail and then we’re a bit jaded by the whole notion.  I think, “yeah, you could try to sell it but it won’t work.”  It’s not so much envy as complacency or a subtle smugness with a deep understanding of the fragility of the economic structure of crafting.  That’s why crafters don’t suggest to one another that they should sell something.

2.  The other thing I thought was interesting about this exchange was that the people telling me I should sell the chairs were issuing a compliment.  In our culture the greatest compliments are economic.  The way you say you like something and that you think it has value is to suggest that it would sell.  They may have actually been suggesting that it would sell, but they were also (or maybe instead of) saying that they appreciated the skill involved and that they found the finished project to be aesthetically appealing.  Would any of them actually buy a chair like that?  Who knows, but probably not.

*How lucky is Mama Miller to have had the barn to dump her crafts in.  A built in justification narrative that allowed her to sustain the engagement of art making behaviors over time.

Happiness Economics

March 3, 2011

Happiness Economics as an emerging discipline or sub-discipline of both happiness studies and behavioral economics.