Ch. 4 - The Cost of Social Norms

[Chris OConnor]

Ch. 4 - The Cost of Social Norms

[realiz]

I found it hard to relate to the dividing line in market norms and social norms that Ariely referred. This could be because I am from a very small city and I have a business here. To me, social norms affect all areas of life, inlcuding our economic one. Our customers here might be our friends, our neighbours, our children's teachers, etc. Building relationships is part of doing business and with every transaction there is a social norm aspect included. I think it is a falacy to think that you can separate these.

Ariely reasoned that having a price on things negated all social norms from this exchange, and as soon as the price was gone, suddenly social norms kicked in. One example was the experiment where the chocolates were offered for various prices ranging down to 1 cent and the predictable way that people took more as the price lowered until there was no cost (free) and then suddenly took less. He concluded that without a price people were suddenly switched to 'social norms' and began thinking of others and not themselves. Again, I just do not agree with his conclusion from this experiement. It is a social norm to me that if someone states there expectation in an exchange and you both agree to it, then your social obligation will be met by this action. Such as, if you help me clean my house, I'll drive you to the doctors. When someone decided on a price they want to charge for an item, the buyer knows his obligation is met by paying that price, so he can take as many of the items he wants and pay the price (obligation). When items are free, the person taking those items is not sure of obligation and is doing nothing in return for taking the item and so takes less because of this, they are not sure about obligation and therefore cannot meet it. If the sign said FREE (please take as many as you want as they all need to go!) then the obligation is stated: taking the item is meeting an obligation! You are helping out by doing this.

My point is only that Ariely makes a single conclusion for behaviours that is not supported by his experiments. His experiment shows a result, and then he concludes a reason for the result that is really speculation and more likely there are various factors that contribute.

Ariely talks about the wedding dress behaviour as well being driven by greed and that social norms do not apply because economic ones take precedents. I have met people who love to go to big sales or shop on those marathon all night savings. To me, these activities are as much about enjoyment, almost a sport in themselves, than they are about saving money. There is a challenge involved in trying to get a wedding dress worth $10,000 for only $259 that is more closely aligned to winning a challenge than it is to making a purchase. Social norms dictate what kind of behavior is acceptable in this situation, just as certain behaviors at a world cup soccer game would be different that what you would see at a 5-year old's soccer match.

Again, I disagree with what this example states about behavior in the irrational and/or rational terms that Ariely discusses.

[DWill]

I found it hard to relate to the dividing line in market norms and social norms that Ariely referred. This could be because I am from a very small city and I have a business here. To me, social norms affect all areas of life, inlcuding our economic one. Our customers here might be our friends, our neighbours, our children's teachers, etc. Building relationships is part of doing business and with every transaction there is a social norm aspect included. I think it is a falacy to think that you can separate these.

I guess I would disagree that Dan is saying that marketplace norms dictate that people aren't being social as they apply these norms to transactions of whatever kind. I don't think he's saying there's some bright line between social and marketplace norms, either. Clearly marketplace norms encourage people to interact socially, and clearly the two norms become combined in various ways. But he's making a distinction that to me is of general use. His examples show conflict can arise when we mistakenly apply the norm that is inappropriate to the situation, such as offering the mother-in-law money for the lavish dinner, or paying volunteers a token wage for their efforts. Where I would agree with your view is that the different considerations that come up in social norms, when related to economic exchanges, are not in a meaningful sense irrational. They are actually quite rational because they follow social logic. I suppose I'm not as satisfied with Dan's use of rational/irrational as I at first thought.

Ariely reasoned that having a price on things negated all social norms from this exchange, and as soon as the price was gone, suddenly social norms kicked in. One example was the experiment where the chocolates were offered for various prices ranging down to 1 cent and the predictable way that people took more as the price lowered until there was no cost (free) and then suddenly took less. He concluded that without a price people were suddenly switched to 'social norms' and began thinking of others and not themselves. Again, I just do not agree with his conclusion from this experiement. It is a social norm to me that if someone states there expectation in an exchange and you both agree to it, then your social obligation will be met by this action. Such as, if you help me clean my house, I'll drive you to the doctors. When someone decided on a price they want to charge for an item, the buyer knows his obligation is met by paying that price, so he can take as many of the items he wants and pay the price (obligation). When items are free, the person taking those items is not sure of obligation and is doing nothing in return for taking the item and so takes less because of this, they are not sure about obligation and therefore cannot meet it. If the sign said FREE (please take as many as you want as they all need to go!) then the obligation is stated: taking the item is meeting an obligation! You are helping out by doing this.

Well, I took his point to be that when a price is put on anything, we are fulfilling a simple contract by paying the price, and as long as we pay the price for each item, we are released from thinking about the social consequences of how many we take. We feel we are giving the seller what he wants if we buy all that he has, so we can feel pretty good about that. There is really no obligation to think about. When the "price" is zero, Dan says that suddenly we think about how the quantity we take might be seen by others who also would like some. Would they think we're being piggy to take a lot? So we adjust our taking. In your last example, the sign saying "Take all you want" might still focus the taker on how much it is proper to want, when others should be given the chance to have some, too. Again, though, this thinking is far from irrational.

Ariely talks about the wedding dress behaviour as well being driven by greed and that social norms do not apply because economic ones take precedents. I have met people who love to go to big sales or shop on those marathon all night savings. To me, these activities are as much about enjoyment, almost a sport in themselves, than they are about saving money. There is a challenge involved in trying to get a wedding dress worth $10,000 for only $259 that is more closely aligned to winning a challenge than it is to making a purchase. Social norms dictate what kind of behavior is acceptable in this situation, just as certain behaviors at a world cup soccer game would be different that what you would see at a 5-year old's soccer match.

I'd never heard of this "running of the brides" that he uses as an example. If it is really as intense a competition as he says it is, with all being fair in love and bargain-hunting, it seems to me that it's a great example of market norms justifying cut-throat behavior. But again, his point is not to say that shopping--even this kind of shopping--cannot be a social event. He uses the word "social" only in an economic sense. "Social" economic exchanges rely on different rules from market ones.

Again, I disagree with what this example states about behavior in the irrational and/or rational terms that Ariely discusses.

That's a good point about the author perhaps trying to force-fit his concept to situations where it might not work.

[seespotrun2008]

I found it hard to relate to the dividing line in market norms and social norms that Ariely referred. This could be because I am from a very small city and I have a business here. To me, social norms affect all areas of life, inlcuding our economic one. Our customers here might be our friends, our neighbours, our children's teachers, etc. Building relationships is part of doing business and with every transaction there is a social norm aspect included. I think it is a falacy to think that you can separate these.

This is a very interesting point. I am wondering if it makes a difference if we are in a smaller community. Maybe there is more of a mix. For me this chapter sort of formed an idea of why people may chuck social responsibility once money becomes involved. Of course, this is not true of everyone, but there is definitely a lot of that in bigger companies. Is it because you do not know the people that you are serving? Or is it because the terms change once money becomes involved as Ariely seems to say?

I know when I volunteer with non-profits, I am always treated extremely well. The instant money becomes involved, however, and I am paid, even non-profits will treat you badly. Maybe this is a separate issue. This chapter definitely made me think.

Ariely talks about the wedding dress behaviour as well being driven by greed and that social norms do not apply because economic ones take precedents. I have met people who love to go to big sales or shop on those marathon all night savings. To me, these activities are as much about enjoyment, almost a sport in themselves, than they are about saving money. There is a challenge involved in trying to get a wedding dress worth $10,000 for only $259 that is more closely aligned to winning a challenge than it is to making a purchase. Social norms dictate what kind of behavior is acceptable in this situation, just as certain behaviors at a world cup soccer game would be different that what you would see at a 5-year old's soccer match.

I like your point, that this behavior is more about competition than it is about the money itself. But then again, isn’t that what money creates in us anyway? It is a competition, not for the money itself but for the world’s resources. Money gives more power over people and resources. It seems like these dresses represent that power in a way. These people could never really afford those dresses on their own but once a year, or however often this is, they can pretend that they have the power that would accompany owning those designer dresses.

[DWill]

For me this chapter sort of formed an idea of why people may chuck social responsibility once money becomes involved. Of course, this is not true of everyone, but there is definitely a lot of that in bigger companies. Is it because you do not know the people that you are serving? Or is it because the terms change once money becomes involved as Ariely seems to say?

If I might say something about this juicy point you make. I don't know if it's so much that people chuck social responsibility as much as it's a feature of our system to give everyone permission to pursue their own economic happiness without worrying about any social consequences. Let me note here that I'm in favor of such a system, for all its problems. I'm reading a book about China in the early and mid 1900s and seeing how the opposite approach looks, in which economic equality (or near-equality) is mandated by the state. Socialist countries in Europe (no, TP members, not the U.S.) try to have it both ways, and through heavy taxation of big earners they reduce the income disparity between top and bottom. This sounds good in a way, but I'm probably at bottom indoctrinated to the American view that individuals should be able to have as much as they want through their own (honest) efforts.

In a later chapter, Ariely touches on your other point about the effect of remoteness on honesty and ethics. There he says that money, actual currency, tends to keep us honest, whereas with things that only represent money (such as products and labor) we get all loosey-goosey ethically. It might be the remoteness from real cash that allows us to rationalize some dishonest behavior; it makes it easier for us to become thieves. I'm also reminded of the relative ease with which pilots drop bombs on people from five miles in the air, whereas they would experience mental anguish if they could see people being blown to bits.

I know when I volunteer with non-profits, I am always treated extremely well. The instant money becomes involved, however, and I am paid, even non-profits will treat you badly. Maybe this is a separate issue. This chapter definitely made me think.

That's an interesting point, too. It must be that one of the pleasures of volunteering is that we realize we are putting ourselves beyond the reach of "the man." We have power in a way--our offer of our time and skill for free, and any smart organization knows that such an offer requires the utmost respect from the paid people, or else the volunteers will just walk, of course. Ariely's main point about volunteering is that it relies on social norms, not market ones. If market norms are introduced, say by paying volunteers a token wage, it would be likely that the volunteers would quit. They'd have to reflect on the insult of how little the now-employer values their skills. They weren't in it for the money in the first place. Perks are a different matter. These can be given without the volunteers feeling they are being bought off, and no strings are attached. Smart non-profits offer good perks. Volunteers, even though they're donating something of far greater value than the value of the perks, like the feeling of getting something for free! I know that I, as a volunteer who mows the grass at a non-profit, like the feeling of leaving the job with more gas in my mower than when I started. Silly, but true.

I like your point, that this behavior is more about competition than it is about the money itself. But then again, isn’t that what money creates in us anyway? It is a competition, not for the money itself but for the world’s resources. Money gives more power over people and resources. It seems like these dresses represent that power in a way. These people could never really afford those dresses on their own but once a year, or however often this is, they can pretend that they have the power that would accompany owning those designer dresses.

I agree that if the items weren't seen as representing extraordinary values, there would be no sense in the people competing for them. So it is all about the money. There is the thrill of the hunt thrown in.

The power in money might have more to do with the importance that cultures give it than with any intrinsic power it has. In most of the world now, money is certainly king. I'd still have to say that monetary systems were an important and beneficial invention, though. We might not realize it, but social norms, when they're more powerful than they are in our society, can be oppressive. More traditional societies can have strict rules about how much resources one is supposed to devote in given situations, say in marriage or hospitality. We have rather weak social norms as they relate to our economic decisions.

[seespotrun2008]

If I might say something about this juicy point you make. I don't know if it's so much that people chuck social responsibility as much as it's a feature of our system to give everyone permission to pursue their own economic happiness without worrying about any social consequences. Let me note here that I'm in favor of such a system, for all its problems.

Yes, I agree. It is a major theme in the American system to, as you say: “give everyone permission to pursue their own economic happiness without worrying about any social consequences”. Many Americans like that idea. Unfortunately, no economic or political system is perfect. However, I think that forgetting that we have a responsibility to each other and to our communities is very dangerous as well. It is a huge mistake and I would argue that that is what causes many of our problems. Americans have gotten used to forgetting that we live in a country with a lot of other people. And, we are a global community as well. We have bought into a concept that we deserve the best and that our wants and needs as individuals are the most important thing.

There is kind of a concept in America that government is the bad guy. We forget that we are the government. We are a republic and vote people into office. We give organizations and individuals power. And when we get together as a group we make a huge difference. So why would we be opposed as a group to taking care of our communities’ health care, education, police force, fire department, etc. There is a lot of strength in numbers. I have also learned from marriage that in a family or a community there are sacrifices that we make for each other. I do not think that is a bad thing. It does mean making other people just as important as ourselves.

In a later chapter, Ariely touches on your other point about the effect of remoteness on honesty and ethics. There he says that money, actual currency, tends to keep us honest, whereas with things that only represent money (such as products and labor) we get all loosey-goosey ethically. It might be the remoteness from real cash that allows us to rationalize some dishonest behavior; it makes it easier for us to become thieves. I'm also reminded of the relative ease with which pilots drop bombs on people from five miles in the air, whereas they would experience mental anguish if they could see people being blown to bits.

I remember reading that but I cannot remember where he talks about this. I remember thinking something about that concept also but I cannot remember what. Perhaps you can direct me to where he talks about this?

I do know that the further we are from each other the easier it is to treat each other badly. For example, in your example of war, in order to kill each other we have to disassociate ourselves from each other. That means making another group inhuman or so different from ourselves that we can justify the awful treatment of another group. They are “savages” or “uncivilized”, unlike us. That is what happens in the prejudice of another group as well. They are not like “us” so therefore they do not deserve the same treatment as we do. Because of that we can justify sexism or racism.

I remember when I worked for a small company and I did not know the CEO at all. I did not even know what he looked like and he was right next door. He never bothered to come out and meet the people who worked for him. I would argue that that made it easier for him to treat his employees as disposable. If he really knew the people who worked for him, their lives, and their families then he would have wanted to pay a decent wage and make sure that they have health care. Because he never met any of them he ensured that he did not have to worry about treating them well. I think that happens in a lot of American business; ship it 3000 miles away or overseas and you do not have to worry about individuals or communities. Therefore, if the price to stay there becomes too high you can just pull your business out and devastate that community. That is the price that we pay for our individuality; we devastate ourselves and world communities. Not that individuality is always a bad thing; I just think that we need a good balance of individuality and community.

That's an interesting point, too. It must be that one of the pleasures of volunteering is that we realize we are putting ourselves beyond the reach of "the man." We have power in a way--our offer of our time and skill for free, and any smart organization knows that such an offer requires the utmost respect from the paid people, or else the volunteers will just walk, of course.

That is definitely true. There are power dynamics involved in both scenarios. What does that say about the market? Does that mean that the instant money becomes involved we instantly have economic inequality? Is that just the nature of money? Find that chapter where he talks about money vs things. I would like to revisit that. In this chapter, it seemed to me that social interaction gave us more equality. Grandma makes thanksgiving dinner because she wants her family around and we get the joy of each others' company as well as good cooking. It is a win win. In volunteering, both parties win. I love feeling like I am helping and the organization gets free help. Does money just ruin that? I was raised on the concept that “the love of money is the root of all evil.” Is that true?

The power in money might have more to do with the importance that cultures give it than with any intrinsic power it has. In most of the world now, money is certainly king. I'd still have to say that monetary systems were an important and beneficial invention, though.

I guess what I meant here is that we have more choices the more money we have. That gives us more power. In New Orleans, the people who suffered the most were those who did not have the financial resources to get out. It is the same for someone who is in a domestic violence situation. Money creates choice. And maybe you are right, that is probably because of the importance that we give it in our society. It is still about giving people choice, and that gives us power.

We might not realize it, but social norms, when they're more powerful than they are in our society, can be oppressive. More traditional societies can have strict rules about how much resources one is supposed to devote in given situations, say in marriage or hospitality. We have rather weak social norms as they relate to our economic decisions.

That is very true. I have a friend who is Muslim, and knows many people from Islamic countries. She argues that many of the problems they have in the middle east come from tribal rules. The way women are treated or in-country fighting for example, have nothing to do with Islam. Rather, those are ancient tribal traditions that have been passed down for centuries. However, everyone in that community knows that those rules must be followed. Perhaps money is not the problem but human beings.

[DWill]

Yes, I agree. It is a major theme in the American system to, as you say: “give everyone permission to pursue their own economic happiness without worrying about any social consequences”. Many Americans like that idea.

I might not have put that very well. I meant more like "without interference from social norms." In other words, we're by conception an individualistic nation.

Unfortunately, no economic or political system is perfect.

Every system, like individuals, has the weaknesses of its strengths.

However, I think that forgetting that we have a responsibility to each other and to our communities is very dangerous as well. It is a huge mistake and I would argue that that is what causes many of our problems. Americans have gotten used to forgetting that we live in a country with a lot of other people. And, we are a global community as well. We have bought into a concept that we deserve the best and that our wants and needs as individuals are the most important thing.

I don't have any international experience. However, it's my impression that community involvement has been a historic strength of the U.S.,relatively speaking, along with a strong tradition of volunteerism. This may have weakened in the last 50 years or so, but the full story would have to include a comparison with other countries. I agree that we lag behind in joining with the world community.

There is kind of a concept in America that government is the bad guy. We forget that we are the government. We are a republic and vote people into office. We give organizations and individuals power. And when we get together as a group we make a huge difference. So why would we be opposed as a group to taking care of our communities’ health care, education, police force, fire department, etc. There is a lot of strength in numbers. I have also learned from marriage that in a family or a community there are sacrifices that we make for each other. I do not think that is a bad thing. It does mean making other people just as important as ourselves.

The problem is, if we're not involved, if all we do is vote and nothing else, we're really not the government. There is a big question whether government, especially the federal government, is responsive to those who technically grant them the power. You don't have to be Tea Party to have a healthy suspicion of carte blanche government.

I remember reading that but I cannot remember where he talks about this. I remember thinking something about that concept also but I cannot remember what. Perhaps you can direct me to where he talks about this?

I read the first edition. He talks about the greater power of money in Chapter 11, "The Context of Our Character, Part I."

That is definitely true. There are power dynamics involved in both scenarios. What does that say about the market? Does that mean that the instant money becomes involved we instantly have economic inequality? Is that just the nature of money? Find that chapter where he talks about money vs things. I would like to revisit that. In this chapter, it seemed to me that social interaction gave us more equality. Grandma makes thanksgiving dinner because she wants her family around and we get the joy of each others' company as well as good cooking. It is a win win. In volunteering, both parties win. I love feeling like I am helping and the organization.

His point about money vs. things (Chap. 11) is that we're more scrupulous around money than around things that represent money. We wouldn't be likely to take a dime from petty cash at work to buy a pencil, but we all probably wouldn't have a problem with lifting a work pencil to take home. Ariely says this is irrational thinking.

Social norms vs. market is not good/bad or equal/unequal, I think. Sometimes money provides more equality than social norms can, since social norms tend to be conservative and hard to escape. I prefer that market norms operate in some cases; otherwise things can get awkward and complicated.

[seespotrun2008]

The problem is, if we're not involved, if all we do is vote and nothing else, we're really not the government. There is a big question whether government, especially the federal government, is responsive to those who technically grant them the power. You don't have to be Tea Party to have a healthy suspicion of carte blanche government.

I suppose it is a problem that we have to be active members of our community. If we are not going to be active we may as well just give up and turn it over to a monarchy. That is easier. We do not have to think or do anything then. If you do not like what the king or queen does, well, there is nothing you can do. And voting is a big thing. I agree, we each are responsible for doing more when we can. However, many Americans do not even vote. It is kind of a travesty that we do not bother with something that people fought and died to give us. And I understand that from the perspective of a woman who would not have had the right to vote until 1920.

Social norms vs. market is not good/bad or equal/unequal, I think. Sometimes money provides more equality than social norms can, since social norms tend to be conservative and hard to escape. I prefer that market norms operate in some cases; otherwise things can get awkward and complicated.

This is true. Societies and power structures are very complicated.

[seespotrun2008]

Hey Dwill,
You said you had never heard of the running of the brides at Filene's Basement. Well, here it is:

http://abclocal.go.com/wls/story?sectio ... id=7572223

Don't ask me, I wore a sari for my wedding.

[JulianTheApostate]

Here's a personal anecdote that involves this chapter.

My wife and I split up six weeks ago. I sent her note suggesting that we hire separate lawyers to negotiate a settlement, as my family had been pushing me to do. My wife was angered by that suggestion, and she subsequently explained her anger by referring to this chapter. In her mind, bringing in lawyers switched our relationship from social norms to market norms.

I didn't quite buy that argument, since market norms are in play when we divide up our assets. Still, we managed to come up with an arrangement, without lawyers, that we both think is reasonable.