Carlson School of Management

  1. If We Go Over the Fiscal Cliff, Will People Spend or Save?

    Posted: Monday January 14, 2013

    Research from Associate Professor of Marketing Vlad Griskevicius suggests childhood environments may hold the key

    In the face of hard times, which strategy gives us the best shot at survival: saving for the future or spending resources on immediate gains? The answer may depend on the economic conditions we faced in childhood, according to new research published in Psychological Science, a journal of the Association for Psychological Science.

    Drawing on life history theory, Associate Professor Vladas Griskevicius of the University of Minnesota's Carlson School of Management and colleagues hypothesized that the strategy a person takes when times are tight may be determined, at least in part, by features of their childhood environment.

    The researchers hypothesized that people who grew up unpredictable, harsh conditions (e.g., poverty), would take a "fast" strategy, focusing on immediate gains and ignoring long-term consequences. People who grew up in more predictable, comfortable conditions, however, would take a "slow" strategy, delaying immediate gratification in an effort to increase future payoffs.

    In two experiments, the researchers primed half of the participants to think about economic recession. All of the participants then completed tasks related to risk-taking and impulsive decision-making.

    Participants who grew up in poorer homes responded to recession cues with riskier, more impulsive responses than participants in the control group, consistent with a "fast" strategy. They were also faster to approach luxury good temptations. Participants who grew up in wealthier homes, on the other hand, responded to recession cues by showing less risky, less impulsive responses than participants in the control group, consistent with a "slow" strategy. They were also slower to approach the luxury goods.

    In a third experiment, Griskevicius and colleagues found evidence that these different life history strategies may manifest as oxidative stress as detected in urine, a physiological indicator of cellular damage that can be accelerated by environmental stressors (such as those associated with poverty).

    "These experiments show that our early childhood environment can program our life history strategy for the rest of our lives," says Griskevicius. "During good times, the tendencies associated with fast versus slow strategies can be dormant, but they emerge under duress."

    Importantly, these tendencies can influence our responses in automatic and non-deliberative ways -- showing up even at the physiological level.

    The trade-offs we make in times of scarcity have important consequences, but the researchers emphasize that neither strategy is inherently good or bad.

    "Lots of research assumes that delay of gratification is always a good thing, but the current research suggests that it's sometimes smart to be impulsive," Griskevicius explains. "For people who expect to live in a harsh and unpredictable environment, it's more adaptive to be impulsive and maximize present resources and opportunities."

    ###

    The APS journal Psychological Science is the highest ranked empirical journal in psychology. For a copy of the article "When the Economy Falters, Do People Spend or Save? Responses to Resource Scarcity Depend on Childhood Environments" and access to other Psychological Science research findings, please contact Anna Mikulak at 202-293-9300 or amikulak@psychologicalscience.org.

  2. Research Sheds New Light on Job Search Demands

    Posted: Wednesday November 28, 2012

    Study helps employed and unemployed job seekers prepare for and cope with challenges

    New research on the challenges and demands that job seekers face may help professionals better navigate their job-search experience. The study, conducted by the University of Minnesota's Carlson School of Management and TheLadders, and today published in Personnel Psychology, found five layers of context-related, job-search demands encountered by both employed and unemployed job seekers.

    "There is a lot of information on specific job-searching techniques, but there is very little about the process itself," said the paper's lead author Connie Wanberg, the Industrial Relations Faculty Excellence Chair at the Carlson School. "This study provides a realistic preview of the job-search process, as well as lessons about coping with the challenges and surprises people faced."

    The authors conducted a rigorous, qualitative investigation of the experiences of 40 unemployed, 23 employed and nine partially employed white-collar, managerial-level job seekers. Interviewing professionals seeking positions in finance, human resources, marketing, operations and sales allowed the researchers to focus on the difficulties of the job search, rather than economic challenges.

    Analyzing the responses, researchers determined that five major types of context-related, job-search demands existed within employed and unemployed job seekers: omnibus, organizational, social, task and personal. These types, or layers, contained 13 common categories:

    1. Economic conditions
    2. Employment status
    3. Insistence on a perfect match
    4. Lake of professionalism, competence or efficiency
    5. Vague/dated advertising
    6. Demographic discrimination
    7. Social network
    8. Depersonalization
    9. Uncertainty
    10. Repeated rejection
    11. Monotony
    12. Impact on the family and finances
    13. Job decisions

    According to Wanberg, one of the most common obstacles job seekers faced was feeling that they were in a black hole, stuck in a situation from which they cannot escape.

    "Frequently, individuals talked about how they would send their resumes into a black hole and rarely heard back from a company - sometimes even after getting an interview," says Wanberg. "Additionally, we heard that it was challenging to find the right fit between a person's skills and the jobs they were applying for."

    Many job seekers started their search too broadly and learned to become more specific over time. Conversely, others began their search with a too-narrow approach and were later forced to become less specific to achieve success.

    Interview subjects also noted the depersonalization of the search process. Job seekers repeatedly experienced a lack of professionalism by HR departments, citing examples of last-minute cancelations, excessive waiting time, out-of-date job postings, and interviewers who lacked knowledge and experience.

    Coping with Job Search Demands

    While the job-seeking experience was a source of frustration, those who kept a positive attitude with successful coping behaviors found the hunt to be energizing, and were better at developing strategies to manage their situations. Positive responses included maintaining individual self-confidence, exercising, volunteering, seeking job-search advice from a career coach, or making time for fun activities.

    "Job seeker responses indicated several examples of learning, increased insight, and changes of strategy in the search process, said Archana Agrawal, vice president of strategy at TheLadders. "For at least some members of our sample, the enjoyment of job search seemed to stem directly from the challenge involved. Some individuals remarked that they saw the search as a game, or a hunt to be mastered."
    The study also suggests focusing on learning goals that can help job seekers overcome the likely setbacks in the process.

    "Navigating the Black Hole: Explicating Layers of Job Search Context and Adaptational Responses" appears in the current issue of Personnel Psychology. A white paper, commissioned by TheLadders, can be downloaded here.

  3. Understanding Hindsight Bias

    Posted: Friday September 07, 2012

    Prof. Kathleen Vohs's research in the September 2012 issue of Perspectives on Psychological Science

    Contact: Anna Mikulak
    Association for Psychological Science
    202.293.9300
    amikulak@psychologicalscience.org

    The fourth-quarter comeback to win the game. The tumor that appeared on a second scan. The guy in accounting who was secretly embezzling company funds. The situation may be different each time, but we hear ourselves say it over and over again: "I knew it all along."

    The problem is that too often we actually didn't know it all along, we only feel as though we did. The phenomenon, which researchers refer to as "hindsight bias," is one of the most widely studied decision traps and has been documented in various domains, including medical diagnoses, accounting and auditing decisions, athletic competition, and political strategy.

    In a new article in the September 2012 issue of Perspectives on Psychological Science, a journal of the Association for Psychological Science, psychological scientists Neal Roese of the Kellogg School of Management at Northwestern University and Kathleen Vohs of the Carlson School of Management at the University of Minnesota review the existing research on hindsight bias, exploring the various factors that make us so susceptible to the phenomenon and identifying a few ways we might be able to combat it. This article is the first overview to draw insights together from across different disciplines.

    Roese and Vohs propose that there are three levels of hindsight bias that stack on top of each other, from basic memory processes up to higher-level inference and belief. The first level of hindsight bias, memory distortion, involves misremembering an earlier opinion or judgment ("I said it would happen"). The second level, inevitability, centers on our belief that the event was inevitable ("It had to happen"). And the third level, foreseeability, involves the belief that we personally could have foreseen the event ("I knew it would happen").

    The researchers argue that certain factors fuel our tendency toward hindsight bias. Research shows that we selectively recall information that confirms what we know to be true and we try to create a narrative that makes sense out of the information we have. When this narrative is easy to generate, we interpret that to mean that the outcome must have been foreseeable. Furthermore, research suggests that we have a need for closure that motivates us to see the world as orderly and predictable and to do whatever we can to promote a positive view of ourselves.

    Ultimately, hindsight bias matters because it gets in the way of learning from our experiences.

    "If you feel like you knew it all along, it means you won't stop to examine why something really happened," observes Roese. "It's often hard to convince seasoned decision makers that they might fall prey to hindsight bias."

    Hindsight bias can also make us overconfident in how certain we are about our own judgments. Research has shown, for example, that overconfident entrepreneurs are more likely to take on risky, ill-informed ventures that fail to produce a significant return on investment.

    While our inclination to believe that we "knew it all along" is often harmless, it can have important consequences for the legal system, especially in cases of negligence, product liability, and medical malpractice. Studies have shown, for example, that hindsight bias routinely afflicts judgments about a defendant's past conduct.

    And technology may make matters worse. "Paradoxically, the technology that provides us with simplified ways of understanding complex patterns - from financial modeling of mortgage foreclosures to tracking the flow of communications among terrorist networks - may actually increase hindsight bias," says Roese.

    So what, if anything, can we do about it?

    Roese and Vohs suggest that considering the opposite may be an effective way to get around our cognitive fault, at least in some cases. When we are encouraged to consider and explain how outcomes that didn't happen could have happened, we counteract our usual inclination to throw out information that doesn't fit with our narrative. As a result, we may be able to reach a more nuanced perspective of the causal chain of events.

  4. Better Monitoring of Food Quantity Makes Self-Control Easier

    Posted: Wednesday August 22, 2012

    UMN study shows eating less is about reduced desire as well as willpower

    New research from the University of Minnesota's Carlson School of Management suggests learning how to stop enjoying unhealthy food sooner may play a pivotal role in combating America's obesity problem. The research, published in the Journal of Consumer Research, explores how satiation, defined as the drop in liking during repeated consumption, can be a positive mechanism when it lowers the desire for unhealthy foods.

    "When people talk about self-control, they really imply that self-control is willpower and that some people have it and others don't when facing a tempting treat," says Joseph Redden, an assistant professor of marketing at the Carlson School and lead author of the 'Healthy Satiation: The Role of Decreasing Desire in Effective Self-Control.' "In reality, nearly everyone likes these treats. Some people just stop enjoying them faster and for them it's easier to say no."

    Through a series of experiments, Redden and Texas A&M University assistant professor of marketing Kelly Haws discovered that when people with high self-control eat unhealthy foods they become satisfied with the experience faster than when they are eating healthy foods and thus eat less. In one study, the researchers asked participants to monitor themselves as they ate by counting how many times they swallowed. With this subtle clue to the amount eaten, those with low self-control became satisfied at a faster rate. Redden said they were surprised at how easy it was to recreate self-control - just using a baseball pitch counter made low self-control people act like they had high self-control.

    "People can essentially use attention for how much they are consuming instead of relying on self-control," Redden says. "Really paying a lot more attention to the quantity will lead people to feel satiated faster and eat less."

    About the Carlson School of Management


    Established in 1919 and based in the Twin Cities of Minneapolis and St. Paul, the Carlson School of Management at the University of Minnesota is a recognized leader in business education and research. Its focus on experiential learning, international education and maintaining strong ties to the business community exemplify the school's commitment to excellence. More information about the school can be found at www.carlsonschool.umn.edu.

  5. A Scarcity of College Men Leads Women to Choose Briefcase over Baby

    Posted: Monday April 16, 2012

    UMN study finds ratio of men to women dramatically alters women's choices about career and family

    American women today are more likely to earn college degrees than men with women receiving 57 percent of all bachelor's and 60 percent of all master's degrees. But are there consequences to having more women than men in college?

    Research from the University of Minnesota and University of Texas at San Antonio (UTSA) has found the ratio of men to women dramatically alters women's choices about career and family. When men are scarce, women delay having children and instead pursue high-paying careers.

    "Most women don't realize it, but an important factor in a woman's career choice is how easy or difficult it is to find a husband," said Kristina Durante, assistant professor of marketing at the UTSA College of Business.

    "When a woman's dating prospects look bleak - as is the case when there are few available men - she is much more likely to delay starting a family and instead seek a career."

    In one study, the researchers examined the ratio of single men to single women in each U.S. state and Washington D.C. They found that as bachelors became scarce, the percentage of women in high-paying careers increased, women delayed having children, and had fewer kids when they finally decided to start a family.

    In another study on college campuses, the researchers led women to believe that there were either more men or less men on campus by having participants read one of two news article about the student population. When women read that there were fewer men than women on campus, they became more motivated to pursue ambitious careers rather than start a family.

    "A scarcity of men leads women to invest in their careers because they realize it will be difficult to settle down and start a family," said study coauthor Vlad Griskevicius, assistant professor of marketing at the University of Minnesota's Carlson School of Management. "In fact, the strongest effects were found for women who are least likely to secure a mate."

    "Women who judged themselves to be less desirable to men--those women who are not like Angelina Jolie--were most likely to take the career path when men became scarce," added Durante.

    This research highlights a sexual paradox associated with women's economic and educational advancement. "As women pursue more education and more lucrative careers when they can't find a husband, the ironic effect is that it will only get harder to find a husband as women become more educated and earn higher salaries," said Durante.

    "This is because a woman's mating standards keep increasing as she becomes more educated and wealthy, which further decreases the number of suitable mates. More than ever before, modern women are increasingly forced to make tough choices such as choosing briefcase over baby."

    "Sex Ratio and Women's Career Choice: Does a Scarcity of Men Lead Women to Choose Briefcase Over Baby?" was published in the Journal of Personality and Social Psychology. Durante and Griskevicius's coauthors include the University of Minnesota's Jeffry A. Simpson and Stephanie M. Cantú and Joshua M. Tybur (VU University Amsterdam).

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