Jeff Galak

Prosocial lending in the form of micro-financing, small uncollateralized loans to entrepreneurs in the developing world, has recently emerged as a leading contender as a cure for world poverty. Our research investigates, in a field setting with real world and consequential data, the characteristics of borrowers that engender lending. We observe that lenders favor individual borrowers over groups or consortia of borrowers, a pattern consistent with the identifiable victim effect. They also favor borrowers that are socially proximate to themselves. Across three dimensions of social distance (gender, occupation, and first name initial) lenders prefer to give to those who are more like themselves. Finally, we discuss policy implications of these findings

Is variety of the spice of life? The present research suggests that the answer depends on the rate of consumption. In
three experiments, we find that, whereas a variety of stimuli is preferred to repetition of even a better-liked single stimulus
when consumption is continuous, this preference reverses when the satiation associated with repetition is reduced by
slowing down the rate of consumption. Decision makers, however, seem to under-appreciate the influence of consumption
rate on preference for (and satisfaction with) variety. At high rates of consumption, they correctly anticipate their
own, high, desire for variety, but at low rates of consumption people tend to overestimate their own desire for variety.
These results complicate the picture presented by prior research on the “diversification bias”, suggesting that people
overestimate their own desire for variety only when consumption is spaced out over time.

Although researchers have documented instances of crowd wisdom, it is important to know whether some kinds of judgments may lead the crowd astray, whether crowds’ judgments improve with feedback over time, and whether crowds’ judgments can be improved by changing the way judgments are elicited. We investigated these hypotheses in a sports gambling context (predictions against point spreads) believed to elicit crowd wisdom. In a season-long experiment, fans wagered over $20,000 on NFL football predictions. Contrary to the wisdom-of-crowds hypothesis, faulty intuitions led the crowd to predict “favorites” more than “underdogs” against spreads that disadvantaged favorites, even when bettors knew that the spreads disadvantaged favorites. Moreover, the bias increased over time, a result consistent with attributions for success and failure that rewarded intuitive choosing. However, when the crowd predicted game outcomes by estimating point differentials rather than by predicting against point spreads, its predictions were unbiased and wiser.

This research examines how perception of an unpleasant experience is influenced by the expectation that it will continue. In seven studies, we provide evidence that people tend to brace for the anticipated continuation by mentally preparing for the worst (i.e. strategic pessimism), thus making the past experience seem even more aversive. We further demonstrate this result is due to peoples’ active bracing for the upcoming continuation, that the effect is stronger among people who are more likely to brace in other domains, but disappears when people do not have the time or the cognitive resources to brace themselves.

As instructors we uniformly tell our students that writing should always be clear. This prescription meshes with our intuition, wins confirmation in scores of books on writing, and finds empirical confirmation in research on perceptual fluency: People like content that is easy to process. Nevertheless, in some circumstances people expect content to be difficult, and ease might be interpreted as a lack of quality. Sometimes, difficult is better than easy. We investigate this possibility by asking people to judge the quality of written text which varies in fluency (through the manipulation of font, figure-ground contrast, or facial feedback). Disfluent content was judged higher quality when it was thought to come from a source focused on conveying information than one designed to maximize enjoyment (Studies 1-3). A field experiment (Study 4) confirmed this relationship: when people are not pursuing enjoyment, a disfluent advertisement is actually more effective.

Consumers often overindulge and satiate. Although time and variety tend to help recover this lost enjoyment, we propose that feelings of satiation are constructed, in part, based on salient past experiences at the time of evaluation. Four experiments demonstrate this across three domains: social interaction, music, and food. We show that by making related intervening experiences salient, recovery from satiation for an initially satiated stimulus is accelerated. We develop a theoretical account of this phenomenon and provide some prescriptive measures for both marketers and consumers.

Consumers prefer to watch television programs without commercials. Yet, in spite of most consumers’ extensive experience with watching television, we propose that commercial interruptions can actually improve the television viewing experience. Although consumers do not foresee it, their enjoyment diminishes over time. Commercial interruptions can disrupt this adaptation process and restore the intensity of consumers’ enjoyment. Six studies demonstrate that, although people preferred to avoid commercial interruptions, these interruptions actually made programs more enjoyable (study 1), regardless of the quality of the commercial (study 2), even when controlling for the mere presence of the ads (study 3), and regardless of the nature of the interruption (study 4). However, this effect was eliminated for people who are less likely to adapt (study 5), and for programs that do not lead to adaptation (study 6), confirming the underlying process and identifying crucial boundaries of the effect.

Self-image motives and “sacrosanct beliefs” are powerful motivators of consumer judgment and decision making. The sacrosanct belief that one is rational, for instance, can cause consumers to justify seemingly unwise economic decisions. This article outlines some of the occasions when self-image motives appear to fail. For instance, although consumers occasionally pat themselves on the back for making questionable purchase decisions, at other times they find fault in perfectly reasonable ones. These and other recent findings provide an exception to the more general rule outlined by Dunning (2007).

Enjoyable experiences become less enjoyable when consumed repeatedly. This process is called satiation. One antecedent to satiation is the memory for past consumption. We demonstrate that, aside from the absolute amount of past consumption recalled, people feel more satiated when they merely have the subjective sense of having consumed more recently. This is accomplished by either making the ease of retrieval of past experiences seem subjectively difficult (Studies 1 – 3), or by providing a normative standard against which to compare past consumption (Study 4). This research identifies a new driver of psychological satiation, establishes the role of metacognitive inferences in satiation, and provides insight into how satiation is constructed.

Consumers are often able to choose how often to consume the things they enjoy. The research presented here suggests that consumers tend to consume too rapidly, growing tired of initially well-liked stimuli such as a favorite song (Pilot Study) or snack (Experiment s 1, 2, and 3) more quickly than they would if they slowed consumption. The results also suggest that this occurs not merely because of lapses in self-control, but because of an underestimation of the extent to which breaks reset adaptation. The results present a paradox: Participants who chose their own rate of consumption enjoyed the stimulus less than participants who had a slower rate of consumption chosen for them.

The media landscape has dramatically changed over the past decade, with traditional media (e.g., newspapers, television) now supplemented by social media (e.g., blogs, discussion forums). This new media landscape is not well understood with respect to (i) the joint impacts of traditional and social media on marketing performance (e.g., sales), (ii) how these media types influence each other, and (iii) the mechanisms through which they affect marketing outcomes. These issues are examined with 14 months of daily performance data and media activity for a microfinance website. The authors find that both traditional and social media have strong effects on marketing performance, though a single unit of social media has a much smaller effect than a single unit of traditional media. However, because social media is created in larger volumes than traditional media, it has a sizeable effect on performance (i.e., social media is high-volume, low-margin, whereas traditional media is low-volume, high-margin). Further, social media acts as a broker of information flow in an informal network comprising traditional and social media outlets.

Galak, Jeff and Leif D. Nelson, “A Replication of the Procedures from Bem (2010, Study 8 ) and a Failure to Replicate the Same Results.” [SSRN]

Sometimes uncertain events are more exciting than their certain alternatives. Across four studies, we examined when the emotional antecedents of uncertainty (anxiety and excitement) contributed to the enjoyment of watching televised sports (basketball and European handball). Live events feel more uncertain than identical taped events, and are more enjoyable to watch (Study 1). Nevertheless, eliminating uncertainty by telling viewers who will win does not decrease enjoyment, but betting on the game, which increases anxiety, increases enjoyment (Study 2). In addition, if the game “process” is clarified by informing consumers about every play immediately before it occurs, enjoyment goes up (Study 3), but this pattern of results is reversed when people wager on the outcome of the game (Study 4). We discuss these results in terms of the consumption of mixed emotions, and the moderating role of gambling.

The present research demonstrates that symbolic boundaries such as political borders act as psychological buffers. In experiments 1-3, shoppers avoided crossing a town border to reach a store, even though doing so did not result in a shorter trip. In Experiments 4-6, consumers felt protected from a potentially hazardous environmental feature (experiment 4 and 5) and isolated from a potentially beneficial one (experiment 6) if it was on the other side of a political border—even when the border was clearly only symbolic (experiment 5). Discussion focuses on the source, scope, and implications of these findings.

People tend to think that their preferences are more typical than they really are. This false consensus effect (FCE) emerges, in part, because people are confident in their own preferences, and adjust relatively little for information about others. If people feel less confident in their preferences amongst negative alternatives the FCE would reduce when considering aversive decisions. Three studies confirmed that this was true for losses relative to gains (Study 1) and for judgments of unattractive faces relative to attractive faces (Study 2). Furthermore, when the task was reframed as a rejection, people were more confident about preferences amongst unattractive options, and showed a larger FCE (Study 3).