The Cost of Social Norms (Predictably Irrational)

by D. Ariely

  • We live simultaneously in two worlds: 1) governed by social norms (i.e. friends making friendly requests of on another) 2) governed by market norms (i.e people pay money for a service)
    • These two worlds often collide (i.e. offering to pay for a date and then asking about sex)
  • Experiment: asked people to drag a virtual circle into a virtual box as many times as possible in 5 min ( measure of labor output.
    • There were three groups: 1) paid well to complete the task 2) paid poorly to complete the task 3) not paid to complete task
  • Findings of experiment:
    • The group that was paid well did better than the group paid poorly (159 v. 101 circles)
    • The group that wasn’t paid (but was doing it as a favor–‘social norm’) performed the best (168 circles)
  • What happens when you reward social norms with gift, rather than money?
    • no one is offended by getting a gift because it lies in the realm of social norms; gifts don’t change outcocmes
  • Israeli Day Care example covered (one mentioned in class by professor)
  • When social norms collide with market norms, the social norm goes away for a long time
    • social relationships are not easy to reestablish
  • There is a trend now with companies where they tried to position themselves as your friend
    • “Like a good neighbor, State farm is there”
    • At the same time, they can’t have it both ways. You can’t be a friend and charge hefty surcharges or late fees; that’s not how social relationships work
  • Companies are less 9-5 and more 24-7, this is advantages to them because it creates an environment where social norms prevail
    • as a result, people work harder, spend more time at work, and are more passionate
    • If companies do this, they should provide comprehensive social benefits like childcare, healthcare, exercise rooms, pensions, cafeterias, etc.
  • It’s no surprise why ‘company loyalty’ is at an all-time low; when social norms prevail people leave for better treatment more frequently
  • Burning Man experience for author was formative; it was a great experience in a moneyless society
    • it is a direct rejection of market norms
  • Conclusion: fewer market norms behaviors and more social norms leads to a more satisfying, creative and fulfilling life.

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