The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home
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Sure enough, I got a call from Dick the next day and had a meeting with him soon afterward. “Paul is furious,” the dean told me. “He feels violated by having someone else walk into his class and confront him in front of all the students. He wants you to apologize.”
After telling the dean my side of the story, I conceded that I probably shouldn’t have walked into Paul’s class in anger and reprimanded him. At the same time, I suggested that Paul should apologize to me as well, since in spirit he had interrupted my class three times. Soon it became clear to the dean that I was not going to say “I’m sorry.”
I even tried to point out to him the benefit of this situation. “Look,” I told the dean, “you’re an economist. You know the importance of reputation. I now have a reputation for fighting back when someone steps on my toes, so most likely no one will do this to me again. That means you won’t have to deal with this type of situation in the future, and that’s a good thing, right?” The expression on his face didn’t reveal any appreciation for my strategic thinking. Instead, he just asked me to talk to Paul. (The chat with Paul was similarly dissatisfying on both sides, except that he indicated that I might have some kind of social disability and suggested that I needed help understanding the rules of etiquette.)
My first point in telling this tale of academic obstinacy is to admit that I, too, can behave inappropriately in the heat of the moment (and believe it or not, I have more extreme examples of this). More important, the story illustrates an important aspect of how emotions work. Of course, I could have called Paul when the scheduling conflict first became an issue and spoken to him about it, but I didn’t. Why? Partly because I didn’t know what to do in this situation, but also because I didn’t care that much. Aside from the time when the students left my class and when they arrived in my office the following morning for a makeup session, I was fully engrossed in my work, and I didn’t even remember Paul or think about our scheduling conflicts. But when I saw my students leave the class, I remembered I’d have to teach an extra class the next day; then, when I saw them in Paul’s class, it all converged into a perfect storm. I became emotional and did something I shouldn’t have. (I should also confess that I am often too stubborn to apologize.)
Emotions and DECISIONS
In general, emotions seem to disappear without a trace. For example, let’s say that someone cuts you off in traffic on the way to work. You feel angry, but you take a deep breath and do nothing. Soon enough, your thoughts return to the road, the song on the radio, and the restaurant you might go to later that evening. In such cases, you have your own general approach to making decisions (“decisions” in the diagram below), and your momentary anger has no effect on your similar decisions going forward. (The small-d “decisions” on both sides of the emotions in the diagram below signify the transience of the emotions and the stability of your decision-making strategies.)
But Eduardo Andrade (a professor at the University of California at Berkeley) and I wondered whether the effects of emotions could still affect decisions we make far into the future, long after the original feelings associated with the stubbed toe, the rude driver, the unfair professor, or other annoyances have worn off.
Our basic logic was this: Imagine that something happens that makes you feel happy and generous—say, your favorite team wins the World Series. That night you are having dinner at your mother-in-law’s, and, while in this great mood, you impulsively decide to buy her flowers. A month later, the emotions of the big win have faded away, and so has the cash in your wallet. It is time for another visit to your mother-in-law. You think about how a good son-in-law should act. You consult your memory, and you remember your wonderful flower-buying act from your last visit, so you repeat it. You then repeat the ritual over and over until it becomes a habit (and in general this is not a bad habit to fall into). Even though the underlying reason for your initial action (excitement over the game) is no longer present, you take your past actions as an indication of what you should do next and the kind of son-in-law you are (the kind who buys his mother-in-law flowers). That way, the effects of the initial emotion end up influencing a long string of your decisions.
Why does this happen? Just as we take cues from others in figuring out what to eat or wear, we also look at ourselves in the rearview mirror. After all, if we are likely to follow other people we don’t know that well (a behavior we call herding), how much more likely are we to follow someone we hold in great esteem—ourselves? If we see ourselves having once made a certain decision, we immediately assume that it must have been reasonable (how could it have been otherwise?), so we repeat it. We call this type of process self-herding, because it is similar to the way we follow others but instead we follow our own past behavior.*
NOW LET’S SEE how decisions engulfed by emotions could become the input for self-herding. Imagine that you work for a consulting company and, among your other responsibilities, you also run the weekly staff meeting. Every Monday morning, you ask each project leader to describe their progress from the previous week, goals for the next week, and so on. As each team updates the group, you look for synergies among the different teams. But since the weekly staff meeting is also the only occasion for everyone to get together, it often becomes a place for socialization and humor (or whatever passes for humor among consultants).
On one particular Monday morning, you arrive at the office an hour early, so you start going through a large pile of mail that has been waiting for you. Upon opening one of the letters, you discover that the deadline has passed for registering your kids for ceramics class. You are upset with yourself, and, even worse, you realize that your wife will blame you for your forgetfulness (and that she will bring it up in many future arguments). All of this sours your mood.
A few minutes later, still highly annoyed, you walk into the staff meeting to find everyone chatting happily about nothing in particular. Under normal circumstances you wouldn’t mind. In fact, you think that some chitchat is good for office morale. But today is not a normal day. Under the influence of your bad mood, you make a DECISION. (I’ve capitalized “DECISION” to signify the emotional component.) Instead of opening the meeting with a few pleasantries, you open the meeting by saying sullenly, “I want to talk about the importance of becoming more efficient and not wasting time. Time is money.” The smiles disappear as you lecture everyone for a minute about the importance of efficiency. Then the meeting moves on to other matters.
When you arrive home that night, you find that your wife is actually very understanding. She doesn’t blame you. The kids have too many extracurricular activities anyway. And all your original worry has dissipated.
But unbeknown to you, your DECISION to stop wasting time in meetings has set a precedent for your future behavior. Since you (like all of us) are a self-herding kind of animal, you look to your past behaviors as a guide. So at the start of subsequent staff meetings, you stop the chitchat, dispense with the pleasantries, and get right down to brass tacks. The original emotion in response to the slipped deadline has long passed, but your DECISION continues to influence the tone and atmosphere of your meetings as well as your behavior as a manager for a long time.
IN AN IDEAL world, you should be able to remember the emotional state under which you DECIDED to act like a schmuck, and you would realize that you don’t need to continue to behave that way. But the reality is that we humans have a very poor memory of our past emotional states (can you remember how you felt last Wednesday at 3:30 P.M.?), but we do remember the actions we’ve taken. And so we keep on making the same decisions (even when they are DECISIONS). In essence, once we choose to act on our emotions, we make short-term DECISIONS that can change our long-term ones:
Eduardo and I called this idea the emotional cascade. I don’t know about you, but I find the notion that our DECISIONS can remain hostage to emotions long after the emotions have passed rather frightening. It is one thing to realize how many ill-considered decisions we have made based on our mood�
�choices that, in perfectly neutral, “rational” moments, we would never make. It is another matter altogether to realize that these emotional influences can continue to affect us for a long, long time.
The Ultimatum Game
To test our emotional-cascade idea, Eduardo and I had to do three key things. First, we had to either irritate people or make them happy. This temporary emotional baggage would set the stage for the second part of our experiment, in which we would get our participants to make a decision while under the influence of that emotion. Then we would wait until their feelings subsided, get them to make some more decisions, and measure whether the earlier emotions had any long-lasting influence on their later choices.
We got our participants to make decisions as part of an experimental setup that economists call the ultimatum game. In this game there are two players, the sender and the receiver. In most setups, the two players sit separately, and their identities are hidden from each other. The game starts when the experimenter gives the sender some money—say, $20. The sender then decides how to split this amount between himself and the receiver. Any split is allowed: the sender can offer an equal split of $10:$10 or keep more money for himself with a split of $12:$8. If he’s feeling especially generous, he might want to give more money to the receiver in a split of $8:$12. If he’s feeling selfish, he can offer an extremely uneven split of $18:$2 or even $19:$1. Once the sender announces the proposed split, the receiver can either accept or reject the offer. If the receiver accepts it, each player gets to keep the amount specified; but if the receiver rejects the offer, all the money goes back to the experimenter, and both players get nothing.
Before I describe our particular version of the ultimatum game, let’s stop for a second and think about what might happen if both players made perfectly rational decisions. Imagine that the experimenter has given the sender $20 and that you are the receiver. For the sake of argument, let’s say that the sender offers you a $19:$1 split, so he gets $19 and you get $1. Since you are a perfectly rational being, you might well think to yourself, “What the heck? A buck is a buck, and since I don’t know who the other person is and I am unlikely to meet him again, why should I cut off my nose to spite my face? I’ll accept the offer and at least wind up $1 richer.” That is what you should do according to the principles of rational economics—accept any offer that increases your wealth.
Of course, many studies in behavioral economics have shown that people make decisions based on a sense of fairness and justice. People get angry over unfairness, and, as a consequence, they prefer to lose some money in order to punish the person making the unfair offer (see chapter 5, “The Case for Revenge”). Following these findings, brain-imaging research has shown that receiving unfair offers in the ultimatum game is associated with activation in the anterior insula—a part of the brain associated with negative emotional experience. Not only that, but the individuals who had stronger anterior insula activity (stronger emotional reaction) were also more likely to reject the unfair offers.23
Because our reaction to unfair offers is so basic and predictable, in the real world of irrational decisions, senders can anticipate more or less how recipients might feel about such offers (for example, consider how you would expect me to react if you gave me an offer of $95:$5). After all, we’ve all had experiences with unfair offers in the past, and we can imagine that we would feel insulted and say “Forget it, you #$%*&$#!” if someone were to suggest a $19:$1 split. This understanding of how unfair offers make people feel and behave is why most people in the ultimatum game offer splits that are closer to $12:$8 and why those splits are almost always accepted.
I should note that there is one interesting exception to this general rule of caring about fairness. Economists and students taking economics classes are trained to expect people to behave rationally and selfishly. So when they play the ultimatum game, economic senders think that the right thing to do is to propose a $19:$1 split, and—since they are trained to think that acting rationally is the right thing to do—the economic recipients accept the offer. But when economists play with noneconomists, they’re deeply disappointed when their uneven offers are rejected. Given these differences, I suspect that you can decide for yourself what kinds of games you want to play with fully rational economists and which ones you would rather play with irrational human beings.
IN OUR PARTICULAR game, the starting amount was $10. About two hundred participants were told that the sender was just another participant, but, in reality, the uneven splits of $7.50:$2.50 came from Eduardo and me (we did this because we wanted to ensure that all the offers were the same and that they were all unfair). Now, if an anonymous person offered you such a deal, would you take it? Or would you give up $2.50 in order to make him lose $7.50? Before you answer, consider how your response might change if I preloaded your thoughts with some incidental emotions, as psychologists call them.
Let’s say you are in the group of participants in the anger condition. You begin the experiment by watching a clip from a movie called Life as a House. In the clip, the architect, played by Kevin Kline, is fired by his jerk of a boss after twenty years on the job. Royally pissed off, he grabs a baseball bat and destroys the lovely miniature architectural models of the houses he’s made for the company. You can’t help but feel for the guy.
After the clip is over, the experimenter asks you to write down a personal experience that is similar to the clip you just watched. You might remember the time when, as a teenager, you worked at a convenience store and the boss unfairly accused you of pilfering money from the till; or the time someone else in the office took credit for a project that you had done. Once you’ve finished your write-up (and the intended gnashing of teeth that the unpleasant memory has aroused), you move to the next room, where a graduate student explains the rules of the ultimatum game. You take a seat and wait to receive your offer from the unknown sender. When you get the $7.50:$2.50 offer a few minutes later, you have to make a choice: do you accept the $2.50 or reject it and get paid nothing? And what about the satisfaction of having avenged yourself on that greedy player at the other end?
Alternatively, imagine that you are in the happy condition. Those participants were somewhat more fortunate, since they started out by watching a clip from the TV sitcom Friends. In this five-minute clip, the whole Friends gang makes New Year’s resolutions that are comically impossible for them to keep. (For instance, Chandler Bing resolves not to make fun of his friends and is immediately tempted to break his resolution when he learns that Ross is dating a woman named Elizabeth Hornswaggle.) Again, after watching the clip, you write down a similar personal experience, which isn’t a problem since you too have friends who try to commit to impossible and amusing resolutions every New Year’s. Then you go into another room, hear the instructions for the game, and in a minute or two, your offer appears: “Receiver gets $2.50, sender gets $7.50.” Would you take it or not?
HOW DID THE participants in each of these conditions react to our offer? As you might suspect, many rejected the unfair offers, though they sacrificed some of their own winnings in the process. But more apropos to the goal of our experiment, we found that the people who felt irritated by the Life as a House clip were much more likely to reject the unfair offers than those who watched Friends.
If you think about the influence of emotions in general, it makes perfect sense that we might retaliate against someone who deals unfairly with us. But our experiment showed that the retaliatory response didn’t spring just from the unfairness of the offer; it also had something to do with the leftover emotions that arose while the participants watched the clips and wrote about their own experiences. The response to the films was a different experience altogether that should have had nothing to do with the ultimatum game. Nevertheless, the irrelevant emotions did matter as they spilled over into participants’ decisions in the game.
Presumably, the participants in the angry condition misattributed their negative emotions. They probably thought
something like “I’m feeling really annoyed right now, and it must be because of this lousy offer, so I’m going to reject it.” In the same way, the participants in the happy condition misattributed their positive emotions and may have thought something like “I’m feeling pretty happy right now, and it must be because of this offer of free money, so I’m going to accept it.” And so the members of each group followed their (irrelevant) emotions and made their decisions.
OUR EXPERIMENTS SHOWED that emotions influence us by turning decisions into DECISIONS (no real news here) and that even irrelevant emotions can create DECISIONS. But Eduardo and I really wanted to test whether emotions continue to exert their influence even after they subside. We wanted to discover whether the DECISIONS our happy and angry participants made “under the influence” would be the basis of a long-term habit. The most important part of our experiments was yet to come.
But we had to wait for it. That is, we waited a while, until the emotions triggered by the video clips had time to dissipate (we checked to make sure that the emotions were gone) before presenting our participants with some more unfair offers. And how did our now calm and emotionless participants respond? Despite the fact that the emotions in response to the clips had long passed, we observed the same pattern of DECISIONS as when the emotions were alive and kicking. Those who were first angered in response to poor Kevin Kline’s treatment rejected the offers more frequently, and they kept making the same DECISIONS even when their angry emotions were no longer there. Similarly, those who were amused by the silly situation in the Friends clip accepted the offers more frequently while feeling the positive emotions, and they kept making the same DECISIONS even when the positive emotions dissipated. Clearly, our respondents were calling on their memories of playing the game earlier that day (when they were responding in part to their irrelevant emotions) and made the same DECISION, even though they were long removed from the original emotional state.