Feeling the Future: The Emotional Oracle Effect

Eight studies reveal an intriguing phenomenon: individuals who have higher trust in their feelings can predict the outcomes of future events better than individuals with lower trust in their feelings. This emotional oracle effect was found across a variety of prediction domains, including (a) the 2008 US Democratic presidential nomination, (b) movie box-office success, (c ) the winner of American Idol, (d ) the stock market, (e) college football, and even (f) the weather. It is mostly high trust in feelings that improves prediction accuracy rather than low trust in feelings that impairs it. However, the effect occurs only among individuals who possess sufficient background knowledge about the prediction domain, and it dissipates when the prediction criterion becomes inherently unpredictable. The authors hypothesize that the effect arises because trusting one’s feelings encourages access to a “privileged window” into the vast amount of predictive information that people learn, often unconsciously, about their environments. 


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Feeling the Future: The Emotional Oracle Effect

The effect of weather on consumer spending

During my early days as a store manager, my sales manager expected a sales report each Monday, and an explanation of any deviation from the sales budget. Once I only wrote the weather conditions as it was a simple way of explaining floor traffic in the store (it was situated in a mall). Rain meant many customers whereas sun meant few customers. My boss did´nt seem to think this was good enough as he sent the report back with a note: "I did´nt ask for a weather report!!!"
Recent research, however states that weather conditions do have effects on customers interest in spending their money, apart from the fact that sunshine means more interest in spending time outside.
The research of Kyle B. Murray at School of Business, University of Alberta  "The results of the studies reported in this paper provide evidence of how weather can impact consumer spending. We find that temperature, humidity, snow fall, and, especially sunlight, can affect retail sales."
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The effect of weather on consumer spending

New Theory of Moral Behavior May Explain Recent Ethical Lapses in Banking Industry

Why do some people behave morally while others do not? Sociologists at the University of California, Riverside and California State University, Northridge have developed a theory of the moral self that may help explain the ethical lapses in the banking, investment and mortgage-lending industries that nearly ruined the U.S. economy.

For decades, sociologists have posited that individual behavior results from cultural expectations about how to act in specific situations. In a study, “A Theory of the Self for the Sociology of Morality,” published in the February issue of the journal American Sociological Review, Jan E. Stets of UC Riverside and Michael J. Carter of CSU Northridge found that how individuals see themselves in moral terms is also an important motivator of behavior.

Bankers, stock brokers, and mortgage lenders who caused the recession were able to act as they did, without shame or guilt, perhaps because their moral identity standard was set at a low level, and the behavior that followed from their personal standard went unchallenged by their colleagues, Stets explained.

“To the extent that others in a situation verify or confirm the meanings set by a person’s identity standard and as expressed in a person’s behavior, the more the person will continue to engage in these behaviors,” Stets said of the theory of moral identity she and Carter advance. “One’s identity standard guides a person’s behavior. Then the person sees the reactions of others to his or her behavior.  If others have a low moral identity and others do not challenge the illicit behavior that follows from it, then the person will continue to do what he or she is doing. This is how immoral practices can emerge.”

The sociologists surveyed a diverse group of more than 350 university students in a two-phase study that measured students’ moral identity, assessment of specific situations as having a moral component, and moral emotions, such as guilt and shame. The students first were asked how they responded in specific situations where they had a choice to do the right or wrong thing; for example, copy another student’s answers, drive home drunk, take an item, give to charity, allow another student to copy their answers, let a friend drive home drunk, return a lost item, or return money to a cashier.

Three months later, survey respondents were asked how to rate each scenario in moral terms, and how they thought individuals ought to feel following doing the right or wrong thing in each situation. The students placed themselves along a continuum between two contradictory characteristics — honest/dishonest, caring/uncaring, unkind/kind, unfair/fair, helpful/not helpful, stingy/generous, compassionate/hardhearted, untruthful/truthful, not hardworking/hardworking, friendly/unfriendly, selfish/selfless, and principled/unprincipled. The more that individuals endorsed themselves as honest, caring, kind, fair, helpful, generous, compassionate, truthful, hardworking, friendly, selfless, and principled, the higher their moral identity.

Wherever individuals are located on this continuum, they act with the goal of verifying the meanings of who they are that is set by their moral identity standard, Stets and Carter said. “We found that individuals with a high moral identity score were more likely to behave morally, while those with a low moral identity score were less likely to behave morally. Respondents who received feedback from others that did not verify their moral identity standard were more likely to report guilt and shame than those whose identities were verified,” they said.

The goal is to live up to one’s self-view however that appears across the moral continuum from being very uncaring and unjust to very caring and very just, the researchers said. “When the meanings of one’s behavior based on feedback from others are inconsistent with the meanings in one’s identity standard, the person will feel bad,” they said.

More research is needed to identify the source of moral identity meanings, Stets and Carter said. “Exposure to particular social contexts and individuals may encourage a higher moral identity. For example, when parents are involved in their children’s lives, their children are more likely to recognize moral values. Schools can also sensitize individuals to moral meanings by providing an atmosphere that fosters justice, virtue and volunteering. Religious traditions that promote reflection on moral issues and foster charitable work also help individuals recognize moral meanings.”

Studying the moral self is opportune given the unregulated practices of bankers, stock brokers, and mortgage lenders whose behavior facilitated the recent recession in the United States, Stets and Carter said.

“The cost of their irresponsible practices has touched the lives of many innocent victims, as witnessed in the loss of individuals’ retirement savings, homes, and jobs. The fact that a few greedy actors have the potential to damage the lives of many (as evidenced in the Bernie Madoff case) brings issues of right and wrong, good and bad, and just and unjust to public awareness,” they said. “To understand the illicit behavior of some, we need to study the moral dimension of the self and what makes some individuals more dishonest than others.”

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New Theory of Moral Behavior May Explain Recent Ethical Lapses in Banking Industry

Think Fast! Take Risks! New Study Finds a Link Between Fast Thinking and Risk Taking

New experiments show that the experience of thinking fast makes people more likely to take risks. This discovery suggests that some of the innovations of the modern world—fast-paced movies, social media sites with a constant flow of fresh updates—are pushing people toward riskier behavior. An article describing two experiments showing this effect will appear in an upcoming issue of Psychological Science, a journal of theAssociation for Psychological Science.

Thoughts can flow quickly or slowly. If you start your day with a cup of coffee, and an inbox full of e-mails with only a few minutes to check them, you may find your thoughts racing. But, if you skip your morning coffee and start the day staring at a blank wall, you probably won’t be thinking that fast. “Many aspects of your everyday environment impact the speed of your thinking,” says Emily Pronin, a psychology professor at Princeton University, who cowrote the article with Jesse J. Chandler.

In earlier research, Pronin found that people’s thought speed can be altered, and that being led to think fast puts people in a positive mood. She wondered if fast thinking might also make people more risk taking.

In one experiment, each participant started by reading trivia statements aloud as they appeared on a computer screen. The statements appeared on the screen at a controlled pace that was either about twice as fast as normal reading speed, or about twice as slow. Then the participant did a task in which he or she blew up a series of virtual balloons on their computer screen. Each pump of air put five cents in a bank, but each pump also increased the likelihood that the balloon would burst; if the participant stopped pumping the balloon before it burst, they got to keep the money they banked, but if it burst, they lost all the money. People who had been induced to read at a faster pace were more risk taking: that is, they pumped up the balloons more – and therefore burst them more – than did the people who were led to read at a slower pace.

In a second experiment, people watched one of three versions of a video that varied in its pace. The videos all had the same neutral content (scenes of waterfalls, iguanas, urban landscapes, etc), but they varied in average shot length (or amount of time between cuts). The pacing was either very fast (about fast as a music video), moderate in speed (like a typical Hollywood film), or somewhere in between. Participants then filled out a standard measure asking how likely they were to engage in various risky behaviors over the next six months, like smoking marijuana, having unprotected sex, or leaving work assignments for the last minute. This measure has been shown to predict actual risk taking behavior. The result:  The faster the video people saw, the more risk taking they intended to be over the next six months.

The methods that Pronin and Chandler used for altering people’s thought speed are easy to imagine in the real world. Paced reading, like that used in their first experiment, directly resembles the way that, on some cable news channels, news headlines crawl across the bottom of the screen. And the movie manipulation directly resembles the different paces of film and video that people see in everyday life.

These experiments suggest that how fast people are led to think could impact whether they go on to make risky financial gambles, whether on the stock market or at the casino. The rapidly flashing lights and fast music at a casino might speed up thinking in a way that increases people’s risky tendencies, as might the notorious fast pace of the trading floor.

The pace of the movies we watch has also been steadily increasing over time. The researchers’ second experiment suggests that changes like this may lead people to engage in more risk-taking behaviors like unprotected sex and drug use. “What would make someone think fast? Maybe a fast-paced movie or a salesperson who gives a fast-paced sales pitch,” Pronin says. “Without your knowing it, these things can lead you to be more risk-taking.”

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Think Fast! Take Risks! New Study Finds a Link Between Fast Thinking and Risk Taking

PR: The Company Behind the Brand

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PR: The Company Behind the Brand

The rise of social media: the next wave of disruption to traditional media

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The rise of social media: the next wave of disruption to traditional media

Do Cold Consumers Like to Warm Up to Romance Movies?

Do romance movies warm people up? A new study in the Journal of Consumer Research finds that yes, consumers choose romance movies over other genres when they feel cold.
“We often think of love as being warm. This link between love and warmth appears in everyday language, songs, and poems,” write authors Jiewen Hong (Hong Kong University of Science and Technology) and Yacheng Sun (University of Colorado, Boulder). “But is the connection between romantic love and warmth just a metaphor or is there indeed a direct link between romance and physical warmth?”
In their study, the authors examined the association between romance and warmth in the context of movie preference. The research involved four laboratory studies and an analysis of data from an online movie rental company. In their studies, the authors tested a prediction that romance movies are more desirable when people are physically cold, because coldness activates a need for psychological warmth.
In one study, the authors found that participants who drank cold tea were more likely than people who drank warm tea to choose romance movies over movies from other genres. In another study, the researchers varied the temperature in the room where participants were seated and found the same results.
Interestingly, when participants were made aware of their physical coldness before being asked to make a movie choice, the preference for romance movies disappeared.
To show that the laboratory findings also exist in the real world, the authors analyzed a set of movie rental data from an online DVD rental company. They matched customers’ rental records with historical temperature information and found that, after controlling for customers’ movie genre preferences, people were more likely to rent romance movies when the temperature outside was lower.
“This research offers implications for the movie industry,” the authors write. “Movie studios might be better off releasing their romance movies in the winter season, when the temperatures are low.” 

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Do Cold Consumers Like to Warm Up to Romance Movies?