They’re Only Tokens

Mr "howtolive" reports:

On Friday I had the opportunity to hear author Dan Ariely speak. Dan is an MIT professor on tour to promote his new book, Predictably Irrational. … The example Dan gave was an experiment in which people had the ability to cheat and claim they deserved more money than they actually did. When the payoff was in cash, people only cheated a little, but when the payoff was in tokens which could be immediately redeemed for cash, people cheated a lot more.

Here is a nice book summary by Toby Segaran.  On his website Dan has a video which is like those ads comparing a hip Apple customer to a Windows dork, but this time comparing a hip behavioral economist to a nerdy standard economist.  Completely unfair as argument, but cute nonetheless. 

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  • http://profile.typekey.com/halfinney/ Hal Finney

    Ariely has a couple of interesting games you can play which are supposed to demonstrate various ways that you behave irrationally. The Door Game shows [CENSORED]. Easy Hard shows [CENSORED]. Both of these have been discussed on the New York Times TierneyLab blog. I don’t think either of them quite works to demonstrate what they are supposed to show, but they are still illuminating to try.

  • http://yudkowsky.net/ Eliezer Yudkowsky

    Hal, please don’t post those kinds of spoilers! I practiced the games, but I knew their point, and didn’t learn anything as a result.

    I’ve taken the liberty of editing your comment.

  • Nick Tarleton

    I don’t see why the jvyyvatarff gb cnl gb xrrc lbhe bcgvbaf bcra (rot13’d) demonstrated by the door game is necessarily irrational. I suppose the book demonstrates we have more of it than we should?

  • http://goodmorningeconomics.wordpress.com jsalvati

    Ariely also has a blog, but I haven’t found it that great or illuminating so far.

  • http://bizop.ca Michael Webster

    Ariely’s blog doesn’t seem to be written by him, many times. I get the sense that it is more to create a book buzz than to actually engage an audience.

  • http://profile.typekey.com/halfinney/ Hal Finney

    Sorry for giving away too much, and thanks to Eliezer for editing my comments. There was a great deal of discussion about the Door Game on the February 25th TierneyLab, and Tierney is supposed to be opening up a thread for comments on the Easy Hard game today, although it has not appeared as I write. Many people shared my opinion that the game did not quite do what it claimed, although some did not seem to fully understand the rules.

    As far as the quoted behavior about more cheating with tokens, this might also shed light on why people are relatively likely to pilfer office supplies and the like. However I don’t think people are particularly more likely to steal valuable objects than correspondingly large sums of cash. I wonder if there is a sort of threshold effect here where certain things get subjectively classified as relatively worthless and cheating with them or stealing them is OK, and these tokens fell into that category.

    Also interesting to consider casino gambling, which is mostly based on chips. It seems a lot easier to put a $50 chip down on a hand than it would be to bet a $50 bill. When tipping with chips I tend to be a lot more generous, too.

    The linked article included this perceptive comment: “As a side note, I also took this as evidence that the pervasiveness of cash has made people forget that it is just as abstracted as tokens are.” There was a time when paper money was seen as just a “token” that stood in for real gold and silver.

  • http://www.churchofrationality.blogspot.com LemmusLemmus

    Isn’t this easily explained by the fact that the learned association of certain pieces of paper with the concept “valuable, don’t waste” is stronger than that of the tokens used? If you want to call this irrational, o.k.

    If the first sentence is true, this might in part explain why people are more of a spendthrift while on holiday (using unfamiliar money).

  • http://entitledtoanopinion.wordpress.com TGGP

    The video didn’t work for me, but the youtube is here.

  • http://zbooks.blogspot.com Zubon

    I took a different lesson from Easy Hard than was intended. It is a time-based game with no limit on the number of plays beyond how many choices you can make in two minutes. Given that, why spend any time in judgment at all? I doubled my score by holding down the Z key; load times were my only barrier. Even if every single puzzle was “easy,” and Z was always the smaller, you would still score more points by getting 2*Z rather than 1*M (since at worst Z is 0.75*M).

  • http://profile.typekey.com/sentience/ Eliezer Yudkowsky

    Props to Zubon.

  • http://www.predictablyirrational.com Dan Ariely

    I do appreciate the discussion and the time people are spending on this (plus I am learning from it). here are a few general comments:

    1) Sorry to disappoint anyone but my blog is mine and no one else is writing it.

    2) As for the 2 games, realize that they are only meant as demonstrations and these are not the real experiments that we draw conclusions from.

    3) The paper that describes the research on the door game (with proper experiments) is at:

    http://www.predictablyirrational.com/pdfs/doors.pdf

    I am very interesting in criticism, but I would much rather have it based on the real research and not on a demonstration that is designed to be an illustration.

    Yours

    Dan