Do Awards Incentivize Non-Winners to Work Harder on CSR?

Curated on Posted on by Stefaan Verhulst

Article by Jiangyan Li, Juelin Yin, Wei Shi, And Xiwei Yi: “As corporate lists and awards that rank and recognize firms for superior social reputation have proliferated in recent years, the field of CSR is also replete with various types of awards given out to firms or CEOs, such as Fortune’s “Most Admired Companies” rankings and “Best 100 Companies to Work For” lists. Such awards serve to both reward and incentivize firms to become more dedicated to CSR. Prior research has primarily focused on the effects of awards on award-winning firms; however, the effectiveness and implications of such awards as incentives to non-winning firms remain understudied. Therefore, in the article of “Keeping up with the Joneses: Role of CSR Awards in Incentivizing Non-Winners’ CSR” published by Business & Society, we are curious about whether such CSR awards could successfully incentivize non-winning firms to catch up with their winning competitors.

Drawing on the awareness-motivation-capability (AMC) framework developed in the competitive dynamics literature, we use a sample of Chinese listed firms from 2009 to 2015 to investigate how competitors’ CSR award winning can influence focal firms’ CSR. The empirical results show that non-winning firms indeed improve their CSR after their competitors have won CSR awards. However, non-winning firms’ improvement in CSR may vary in different scenarios. For instance, media exposure can play an important informational role in reducing information asymmetries and inducing competitive actions among competitors, therefore, non-winning firms’ improvement in CSR is more salient when award-winning firms are more visible in the media. Meanwhile, when CSR award winners perform better financially, non-winners will be more motivated to respond to their competitors’ wins. Further, firms with a higher level of prior CSR are more capable of improving their CSR and therefore are more likely to respond to their competitors’ wins…(More)”.

Against longtermism

Curated on Posted on by Stefaan Verhulst

Essay by Phil Torres: “The point is that longtermism might be one of the most influential ideologies that few people outside of elite universities and Silicon Valley have ever heard about. I believe this needs to change because, as a former longtermist who published an entire book four years ago in defence of the general idea, I have come to see this worldview as quite possibly the most dangerous secular belief system in the world today. But to understand the nature of the beast, we need to first dissect it, examining its anatomical features and physiological functions….

Why do I think this ideology is so dangerous? The short answer is that elevating the fulfilment of humanity’s supposed potential above all else could nontrivially increase the probability that actual people – those alive today and in the near future – suffer extreme harms, even death. Consider that, as I noted elsewhere, the longtermist ideology inclines its adherents to take an insouciant attitude towards climate change. Why? Because even if climate change causes island nations to disappear, triggers mass migrations and kills millions of people, it probably isn’t going to compromise our longterm potential over the coming trillions of years. If one takes a cosmic view of the situation, even a climate catastrophe that cuts the human population by 75 per cent for the next two millennia will, in the grand scheme of things, be nothing more than a small blip – the equivalent of a 90-year-old man having stubbed his toe when he was two.

Bostrom’s argument is that ‘a non-existential disaster causing the breakdown of global civilisation is, from the perspective of humanity as a whole, a potentially recoverable setback.’ It might be ‘a giant massacre for man’, he adds, but so long as humanity bounces back to fulfil its potential, it will ultimately register as little more than ‘a small misstep for mankind’. Elsewhere, he writes that the worst natural disasters and devastating atrocities in history become almost imperceptible trivialities when seen from this grand perspective. Referring to the two world wars, AIDS and the Chernobyl nuclear accident, he declares that ‘tragic as such events are to the people immediately affected, in the big picture of things … even the worst of these catastrophes are mere ripples on the surface of the great sea of life.’

This way of seeing the world, of assessing the badness of AIDS and the Holocaust, implies that future disasters of the same (non-existential) scope and intensity should also be categorised as ‘mere ripples’. If they don’t pose a direct existential risk, then we ought not to worry much about them, however tragic they might be to individuals. As Bostrom wrote in 2003, ‘priority number one, two, three and four should … be to reduce existential risk.’ He reiterated this several years later in arguing that we mustn’t ‘fritter … away’ our finite resources on ‘feel-good projects of suboptimal efficacy’ such as alleviating global poverty and reducing animal suffering, since neither threatens our longterm potential, and our longterm potential is what really matters…(More)”.

The Future is not a Solution

Curated on Posted on by Stefaan Verhulst

Essay by Laura Forlano: “The future is a particular kind of speaker,” explains communication scholar James W. Carey, “who tells us where we are going before we know it ourselves.” But in discussions about the nature of the future, the future as an experience never appears. This is because “the future is always offstage and never quite makes its entrance into history; the future is a time that never arrives but is always awaited.” Perhaps this is why, in the American context, there is a widespread tendency to “discount the present for the future,” and see the “future as a solvent” for existing social problems.

Abstract discussions of the “the future” miss the mark. That is because experience changes us. Anyone that has lived through the last 18 months of the COVID-19 pandemic would surely agree. While health experts are well aware of the ongoing global risks posed by pandemics, no one—not even an algorithm—can predict exactly when, where, and how they might come to be. And, yet, since spring 2020, there has been a global desire to understand precisely what is next, how to navigate uncertain futures as well as adapt to long-term changes. The pandemic, according to the writer Arundhati Roy, is “a portal, a gateway between one world and the next.”

In order to understand the choices that we are facing, it is necessary to understand the ways in which technologies and futures are often linked—socially, politically, and commercially —through their promises of a better tomorrow, one just beyond our grasp. Computer scientist Paul Dourish and anthropologist Genevieve Bell refer to these as “technovisions” or the stories that technologists and technology companies tell about the role of computational technologies in the future. Technovisions portray technological progress as inevitable—becoming cultural mythologies and self-fulfilling prophecies. They explain that the “proximate future,” a future that is “indefinitely postponed” is a key feature of research and practice in the field of computing that allows technology companies to “absolve themselves of the responsibilities of the present” by assuming that “certain problems will simply disappear of their own accord—questions of usability, regulation, resistance, adoption barriers, sociotechnical backlashes, and other concerns are erased.”…(More)”

Building the Behavior Change Toolkit: Designing and Testing a Nudge and a Boost

Curated on Posted on by Stefaan Verhulst

Blog by Henrico van Roekel, Joanne Reinhard, and Stephan Grimmelikhuijsen: “Changing behavior is challenging, so behavioral scientists and designers better have a large toolkit. Nudges—subtle changes to the choice environment that don’t remove options or offer a financial incentive—are perhaps the most widely used tool. But they’re not the only tool.

More recently, researchers have advocated a different type of behavioral intervention: boosting. In contrast to nudges, which aim to change behavior through changing the environment, boosts aim to empower individuals to better exert their own agency.

Underpinning each approach are different perspectives on how humans deal with bounded rationality—the idea that we don’t always behave in a way that aligns with our intentions because our decision-making is subject to biases and flaws.

A nudge approach generally assumes that bounded rationality is a constant, a fact of life. Therefore, to change behavior we best change the decision environment (the so-called choice architecture) to gently guide people into the desired direction. Boosting holds that bounded rationality is malleable and people can learn how to overcome their cognitive pitfalls. Therefore, to change behavior we must focus on the decision maker and increasing their agency.

In practice, a nudge and a boost can look quite similar, as we describe below. But their theoretical distinctions are important and useful for behavioral scientists and designers working on behavior change interventions, as each approach has pros and cons. For instance, one criticism of nudging is the paternalism part of Thaler and Sunstein’s “libertarian paternalism,” as some worry nudges remove autonomy of decision makers (though the extent to which nudges are paternalistic, and the extent to which this is solvable, are debated). Additionally, if the goal of an intervention isn’t just to change behavior but to change the cognitive process of the individual, then nudges aren’t likely to be the best tool. Boosts, in contrast, require some motivation and teachability on the part of the boostee, so there may well be contexts unfit for boosting interventions where nudges come in handy….(More)”.

Consumers Are Becoming Wise to Your Nudge

Curated on Posted on by Stefaan Verhulst

Article by Simon Shaw: “The broader question, one essential to both academics and practitioners, is how a world saturated with behavioral interventions might no longer resemble the one in which those interventions were first studied. Are we aiming at a moving target?

This was the basis for a research project we completed in February 2019 examining reactions of the British public to a range of behavioral interventions. We took a nationally representative sample of 2,102 British adults, and undertook an experimental evaluation of some of marketers’ most commonly used tactics.

We started by asking participants to consider a hypothetical scenario: using a hotel booking website to find a room to stay in the following week. We then showed a series of nine real-world scarcity and social proof claims made by an unnamed hotel booking website.

Two thirds of the British public (65 percent) interpreted examples of scarcity and social proof claims used by hotel booking websites as sales pressure. Half said they were likely to distrust the company as a result of seeing them (49 percent). Just one in six (16 percent) said they believed the claims. 

The results surprised us. We had expected there to be cynicism among a subgroup—perhaps people who booked hotels regularly, for example. The verbatim commentary from participants showed people see scarcity and social proof claims frequently online, most commonly in the travel, retail, and fashion sectors. They questioned truth of these ads, but were resigned to their use:

“It’s what I’ve seen often on hotel websites—it’s what they do to tempt you.”

“Have seen many websites do this kind of thing so don’t really feel differently when I do see it.”

In a follow up question, a third (34 percent) expressed a negative emotional reaction to these messages, choosing words like contempt and disgust from a precoded list. Crucially, this was because they ascribed bad intentions to the website. The messages were, in their view, designed to induce anxiety:

 “… almost certainly fake to try and panic you into buying without thinking.”

“I think this type of thing is to pressure you into booking for fear of losing out and not necessarily true.”

For these people, not only are these behavioral interventions not working but they’re having the reverse effect. We hypothesize psychological reactance is at play: people kick back when they feel they are being coerced….(More)”.

Rationality: What It Is, Why It Seems Scarce, Why It Matters

Curated on Posted on by Stefaan Verhulst

Book by Steven Pinker: “Can reading a book make you more rational? Can it help you understand why there is so much irrationality in the world? These are the goals of Rationality, Steven Pinker’s follow-up to Enlightenment Now. In the 21st century, humanity is reaching new heights of scientific understanding—and at the same time appears to be losing its mind. How can a species that developed vaccines for Covid-19 in less than a year produce so much fake news, medical quackery, and conspiracy theorizing? Pinker rejects the cynical cliché that humans are an irrational species — cavemen out of time saddled with biases, fallacies, and illusions. After all, we discovered the laws of nature, lengthened and enriched our lives, and discovered the benchmarks for rationality itself. Instead, he explains that we think in ways that are sensible in the low-tech contexts in which we spend most of our lives, but fail to take advantage of the powerful tools of reasoning our best thinkers have discovered over the millennia: logic, critical thinking, probability, correlation and causation, and optimal ways to update beliefs and commit to choices individually and with others. These tools are not a standard part of our educational curricula, and have never been presented clearly and entertainingly in a single book—until now. Rationality also explores its opposite: how the rational pursuit of self-interest, sectarian solidarity, and uplifting mythology by individuals can add up to crippling irrationality in a society. Collective rationality depends on norms that are explicitly designed to promote objectivity and truth. Rationality matters. It leads to better choices in our lives and in the public sphere, and is the ultimate driver of social justice and moral progress. Brimming with insight and humour, Rationality will enlighten, inspire, and empower….(More)”.

Psychology and Behavioral Economics: Applications for Public Policy

Curated on Posted on by Stefaan Verhulst

Book edited by Kai Ruggeri: “…offers an expert introduction to how psychology can be applied to a range of public policy areas. It examines the impact of psychological research for public policymaking in economic, financial, and consumer sectors; in education, healthcare, and the workplace; for energy and the environment; and in communications.

Your energy bills show you how much you use compared to the average household in your area. Your doctor sends you a text message reminder when your appointment is coming up. Your bank gives you three choices for how much to pay off on your credit card each month. Wherever you look, there has been a rapid increase in the importance we place on understanding real human behaviors in everyday decisions, and these behavioral insights are now regularly used to influence everything from how companies recruit employees through to large-scale public policy and government regulation. But what is the actual evidence behind these tactics, and how did psychology become such a major player in economics? Answering these questions and more, this team of authors, working across both academia and government, present this fully revised and updated reworking of Behavioral Insights for Public Policy.

This updatecovers everything from how policy was historically developed, to major research in human behavior and social psychology, to key moments that brought behavioral sciences to the forefront of public policy. Featuring over 100 empirical examples of how behavioral insights are being used to address some of the most critical challenges faced globally, the book covers key topics such as evidence-based policy, a brief history of behavioral and decision sciences, behavioral economics, and policy evaluation, all illustrated throughout with lively case studies.

Including end-of-chapter questions, a glossary, and key concept boxes to aid retention, as well as a new chapter revealing the work of the Canadian government’s behavioral insights unit, this is the perfect textbook for students of psychology, economics, public health, education, and organizational sciences, as well as public policy professionals looking for fresh insight into the underlying theory and practical applications in a range of public policy areas….(More)”.

Nudgeability: Mapping Conditions of Susceptibility to Nudge Influence

Curated on Posted on by Stefaan Verhulst

Paper by Denise de Ridder, Floor Kroese, and Laurens van Gestel: “Nudges are behavioral interventions to subtly steer citizens’ choices toward “desirable” options. An important topic of debate concerns the legitimacy of nudging as a policy instrument, and there is a focus on issues relating to nudge transparency, the role of preexisting preferences people may have, and the premise that nudges primarily affect people when they are in “irrational” modes of thinking. Empirical insights into how these factors affect the extent to which people are susceptible to nudge influence (i.e., “nudgeable”) are lacking in the debate. This article introduces the new concept of nudgeability and makes a first attempt to synthesize the evidence on when people are responsive to nudges. We find that nudge effects do not hinge on transparency or modes of thinking but that personal preferences moderate effects such that people cannot be nudged into something they do not want. We conclude that, in view of these findings, concerns about nudging legitimacy should be softened and that future research should attend to these and other conditions of nudgeability….(More)”.

Public health and expert failure

Curated on Posted on by Stefaan Verhulst

Paper by Roger Koppl: “In a modern democracy, a public health system includes mechanisms for the provision of expert scientific advice to elected officials. The decisions of elected officials generally will be degraded by expert failure, that is, the provision of bad advice. The theory of expert failure suggests that competition among experts generally is the best safeguard against expert failure. Monopoly power of experts increases the chance of expert failure. The risk of expert failure also is greater when scientific advice is provided by only one or a few disciplines. A national government can simulate a competitive market for expert advice by structuring the scientific advice it receives to ensure the production of multiple perspectives from multiple disciplines. I apply these general principles to the United Kingdom’s Scientific Advisory Group for Emergencies (SAGE)….(More)”.

Sludge: What Stops Us from Getting Things Done and What to Do about It

Curated on Posted on by Stefaan Verhulst

Book by Cass Sunstein: “How we became so burdened by red tape and unnecessary paperwork, and why we must do better.

We’ve all had to fight our way through administrative sludge—filling out complicated online forms, mailing in paperwork, standing in line at the motor vehicle registry. This kind of red tape is a nuisance, but, as Cass Sunstein shows in Sludge, it can also impair health, reduce growth, entrench poverty, and exacerbate inequality. Confronted by sludge, people just give up—and lose a promised outcome: a visa, a job, a permit, an educational opportunity, necessary medical help. In this lively and entertaining look at the terribleness of sludge, Sunstein explains what we can do to reduce it.

Because of sludge, Sunstein explains, too many people don’t receive benefits to which they are entitled. Sludge even prevents many people from exercising their constitutional rights—when, for example, barriers to voting in an election are too high. (A Sludge Reduction Act would be a Voting Rights Act.) Sunstein takes readers on a tour of the not-so-wonderful world of sludge, describes justifications for certain kinds of sludge, and proposes “Sludge Audits” as a way to measure the effects of sludge. On balance, Sunstein argues, sludge infringes on human dignity, making people feel that their time and even their lives don’t matter. We must do better…(More)”.