People in poverty sometimes behave in ways that perpetuate their socioeconomic condition. By one influential account, these behaviors arise from psychological effects of scarcity on attention that create greater focus toward managing scarce resources, at the cost of attention to potentially-beneficial information outside of this ‘tunnel’. Although the tunneling hypothesis has been widely discussed in academia and beyond, its direct empirical support derives primarily from a landmark study by Shah et al. (2012) in which participants played games while their access to resources was experimentally manipulated, rendering participants either ‘rich’ or ‘poor’. Here, we present new analyses that contest the original interpretation of the data, showing that the behavioral differences between ‘rich’ and ‘poor’ participants are more parsimoniously explained by the game’s structure than by an attentional shift caused by the scarcity manipulation—a conclusion we substantiate through an additional experiment. We contextualize our findings within the literature on scarcity and attention, and highlight the need for greater clarity regarding the tunneling hypothesis itself.
Integrative experiments identify how punishment affects welfare in public goods games
Despite decades of research, the conditions under which punishment promotes cooperation remain unclear. Through an integrative experiment varying 14 design parameters of public goods games across 360 experimental conditions (147,618 decisions from 7100 participants), we reveal substantial heterogeneity in punishment effectiveness: Its impact on welfare ranges from 43% improvement to 44% reduction depending on the game parameters. To characterize these patterns, we developed models that outperformed human forecasters in predicting punishment effectiveness in new experiments. Communication emerges as the most important factor, followed by contribution framing (opt out versus opt in), contribution type (variable versus all-or-nothing), game length, and outcome visibility, though these factors often interact. The results reframe the debate from whether punishment works to when it does, demonstrating how integrative experiments enable discovery of generalizable patterns in social phenomena. , Editor’s summary People face conflicts between maximizing personal gain versus supporting collective interests. If we cooperatively recycle or donate to charities, it benefits society, but it also costs us time and resources that could be selfishly preserved for ourselves. We impose penalties to deter those undesirable or selfish behaviors, but under what conditions do punishments or penalties effectively modify behavior to benefit group welfare? Alsobay et al . systematically and simultaneously varied 14 factors together instead of in isolation. Punishment was unequivocally most effective when paired with consistent communication, particularly over time. Another effective factor was “opting out” or withdrawing some, but not all, endowments already in the public fund. These methodological advances revealed when, rather than whether, punishment works. —Ekeoma Uzogara , INTRODUCTION Human societies face many situations where individual and collective interests conflict, often referred to as social dilemmas. Costly peer punishment has been studied for more than 25 years in public goods games (stylized behavioral experiments in which individuals decide how much to contribute to a shared pool that benefits everyone) as a mechanism to promote cooperation. Prior research has identified many contextual factors that moderate punishment’s effectiveness, including game length, communication, group size, punishment cost, and so on. However, the specific conditions under which punishment improves group welfare remain unclear. RATIONALE We argue that this lack of clarity derives from the dominant experimental paradigm, in which any given study manipulates only one or a few theoretically informed factors. Because such studies differ in many ways (different experimental procedures, populations), their results are often difficult to compare or integrate. Consequently, one can list many factors that have some effect, but cannot say how much each matters relative to the others, or how they work together, and as a result, cannot predict when punishment will help or harm welfare in new settings. To address this fundamental knowledge gap, we use an integrative experimental design and systematically vary 14 parameters across 360 conditions (147,618 decisions from 7100 participants) to elucidate when punishment improves versus undermines welfare in public goods games, which factors matter most, and how they interact. RESULTS The effect of punishment on welfare ranged from 43% improvement to 44% reduction depending on the specific combination of game parameters. To characterize this heterogeneity, we trained a model that outperformed all 553 human forecasters (laypeople and experts) in predicting whether punishment would help or harm welfare in new experiments. Communication emerged as roughly three times more important than any other factor, followed by contribution framing (opt in versus opt out), contribution type (variable versus all-or-nothing), game length, and peer outcome visibility (whether participants can see others’ earnings). These factors often interact. For example, longer games enhance punishment’s effectiveness only when communication is available, and contribution framing effects depend on both contribution type and outcome visibility. CONCLUSION Many phenomena in social science are shaped by many factors whose interactions are consequential, yet the dominant experimental paradigm often limits its inquiry to “does a given effect exist?” and examines hypothesized factors in isolation. As a result, research programs can accumulate many partial explanations without a clear picture of how they combine to determine outcomes across settings. Knowing that factors matter individually is fundamentally different from knowing how much each matters and how they interact. The integrative approach implemented here offers one way forward. It varies many factors simultaneously within a shared design space, evaluates models by their predictive accuracy on new experiments, and probes those models to constrain and develop theory. Our hope is that integrative experiment designs, combined with models that integrate prediction and explanation, represent a path toward more cumulative social science. Integrative experiment reveals when punishment helps versus harms. We systematically varied 14 design parameters across 360 experimental conditions. The effect of punishment on cooperation efficiency ranged from −44% to +43% depending on the specific game parameters. Communication emerged as three times more important than any other factor, followed by contribution framing, contribution type, and game length.
The attention market—and what is wrong with it
Attention is described as a “scarce commodity” that is traded in “a marketplace.” This, it is further claimed, contributes to a “widespread sense of attentional crisis.” But is there really an attention market, and if so, what, if anything, is wrong with it? We defend the claim that there are markets in attention. We provide an account of such attention markets and use that account to address what is morally wrong with them. Our account draws on knowledge of how attention works and what roles it plays in the mind. The attention market trades in an ability to influence our attention – somewhat (though not exactly) like the labor market trades in an ability to influence how we use our capacity for work. Specifically, the commodity it trades in is attentional landscaping potential, viz. the ability to systematically influence patterns of attention by changes to the sensory environment individuals are exposed to. Attention markets thus, we argue, commodify influence over a human capacity that plays a central role in shaping individual experience, agency, and belief formation. This feature of attention markets makes them ethically problematic. As markets in access to external influence, attention markets pose a special threat to individual autonomy and escape the classical liberal defense of free markets. Those who value autonomy should worry about the attention markets that exist today.
Rethinking the cognitive foundations of the attention economy
The attention economy is the economic system in which human attention is the scarce resource. This literature takes a particular passage in Herbert Simon’s seminal Chapter Designing Organization fo...
An attention economic perspective on the future of the information age
In this paper, we apply an attention economic perspective to explain current and predict future trends in our society. We first describe the rise of the attention economy, and we highlight one important mechanism of this economy: a spiral of attention scarcity. Second, we show that an attention economic perspective provides glimpses of a potential future. In particular, we predict an information environment that increasingly targets citizens with attention-grabbing content, form, and technology; a continuing trend toward excessive media consumption levels; and a continuing trend toward inattentive uses of information. We also predict increasing problems of public misinformation and misconceptions; an increased prevalence of certain mental and physical health issues; and an increased reliance on technology to perform mental tasks. At the end of this paper, we show why and how despite these predictions, alternative futures are conceivable. These alternatives largely depend on the behavior of various social actors. We discuss resistance to the attention economy by consumers and producers, a laissez-faire policy toward the attention economy, a policy of taxing attention-seeking efforts, and the promotion of public values in regulatory policies toward the internet.
Rational Inattention: A Review
We review the recent literature on rational inattention, identify the main theoretical mechanisms, and explain how it helps us understand a variety of phenomena across fields of economics. The theory of rational inattention assumes that agents cannot process all available information, but they can choose which exact pieces of information to attend to. Several important results in economics have been built around imperfect information. Nowadays, many more forms of information than ever before are available due to new technologies, and yet we are able to digest little of it. Which form of imperfect information we possess and act upon is thus largely determined by which information we choose to pay attention to. These choices are driven by current economic conditions and imply behavior that features numerous empirically supported departures from standard models. Combining these insights about human limitations with the optimizing approach of neoclassical economics yields a new, generally applicable model.
Exploring the Frontier of Feeds - The Open Garden
Reorienting distribution and monetization in the attention economy.
Exploring the Frontier of Feeds - The Open Garden
Reorienting distribution and monetization in the attention economy.
Why The Rich Think The Poor Are Lazy
The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework
We review 74 experiments with no, low, or high performance-based financial incentives. The modal result has no effect on mean performance (though variance is usually reduced by higher payment). Higher incentive does improve performance often, typically judgment tasks that are responsive to better effort. Incentives also reduce “presentation” effects (e.g., generosity and risk-seeking). Incentive effects are comparable to effects of other variables, particularly “cognitive capital” and task “production” demands, and interact with those variables, so a narrow-minded focus on incentives alone is misguided. We also note that no replicated study has made rationality violations disappear purely by raising incentives.
How Field Experiments in Economics Can Complement Psychological Research on Judgment Biases
This review summarizes results of field experiments examining individual behaviors across several market settings—from open-air markets to rideshare markets to tax-compliance markets—where people sort themselves into market roles wherein they make consequential decisions. Using three distinct examples from my own research on the endowment effect, left-digit bias, and omission bias, I showcase how field experiments can help researchers understand mediators, heterogeneity, and causal moderation involved in judgment biases in the field. In this manner, the review highlights that economic field experiments can serve an invaluable intellectual role alongside traditional laboratory research.
What Would You Do with $500? Spending Responses to Gains, Losses, News, and Loans
Abstract We use survey questions about spending in hypothetical scenarios to investigate features of propensities to consume that are useful for distinguishing between consumption theories. We find that (1) responses to unanticipated gains are vastly heterogeneous (either zero or substantially positive); (2) responses increase in the size of the gain, driven by the extensive margin of spending adjustments; (3) responses to losses are much larger and more widespread than responses to gains; and (4) even those with large responses to gains do not respond to news about future gains. These four findings suggest that limited access to disposable resources, and frictions in adjusting consumption, are important determinants of consumption behaviour. We also find that (5) households do not respond to the offer of a one-year interest-free loan, suggesting that this is not a consequence of short-term credit constraints; and (6) people do cut spending in response to news about future losses, suggesting that neither is this a consequence of myopia. A calibrated precautionary savings model with utility costs of changing consumption, and a sufficient fraction of low-wealth households, can account for these features of propensities to consume on both the extensive and intensive margins.
The Ostrich in Us: Selective Attention to Personal Finances
Abstract We analyze attention to personal finances using a high-frequency panel of bank data, including information on logins. We document a number of robust patterns. Relative to their personal histories, individuals pay more attention when holding more cash and liquidity and when receiving income. In contrast, attention decreases discretely as bank account balances go from positive to negative and then decreases further as overdraft debt increases. We conclude that Ostrich effects in a personal finance context, i.e., the avoidance of obtaining information on everyday personal finances, is a widespread phenomenon and explore a number of explanations for our findings.
Dec 2020 -- Jelle Bruineberg -- Embodied cognition and the attention crisis
Why is everyone so busy?
Time poverty is a problem partly of perception and partly of distribution
Overcoming Salience Bias: How Real-Time Feedback Fosters Resource Conservation
Inattention and imperfect information bias behavior toward the salient and immediately visible. This distortion creates costs for individuals, the organizations in which they work, and society at large. We show that an effective way to overcome this bias is by making the implications of one’s behavior salient in real time, while individuals can directly adapt. In a large-scale field experiment, we gave participants real-time feedback on the resource consumption of a daily, energy-intensive activity (showering). We find that real-time feedback reduced resource consumption for the target behavior by 22%. At the household level, this led to much larger conservation gains in absolute terms than conventional policy interventions that provide aggregate feedback on resource use. High baseline users displayed a larger conservation effect, in line with the notion that real-time feedback helps eliminate “slack” in resource use. The approach is cost effective, is technically applicable to the vast majority of households, and generated savings of 1.2 kWh per day and household, which exceeds the average energy use for lighting. The intervention also shows how digitalization in our everyday lives makes information available that can help individuals overcome salience bias and act more in line with their preferences. This paper was accepted by Uri Gneezy, behavioral economics.
How to reclaim your attention from the distraction economy | Psyche Videos
Could you watch this video on full screen, 1x speed, with no distractions? Here are five steps to rebuild your attention span
