November 2005
Volume 18, Number 11
Enough Is Enough
It goes without saying, doesn't it?: More is better — at least, when we're talking money, ice cream, or the other good things in life.
Actually, it's not so simple. Economists have long known that as the magnitude of some good increases, people's subjective evaluations of the worth of that good may not increase proportionally. A 10-ounce serving of chocolate ice cream is appealing, but not fully twice as appealing as a 5-ounce serving. A nice juicy steak is appealing. Two nice juicy steaks? No, thank you.
This quirk of human behavior has usually been chalked up to two psychological processes: satiation (after the first 5 ounces of ice cream, we're not as hungry for the second 5) and diminishing sensitivity (the more units of a stimulus we're exposed to, the less we register additional ones; for example, a 20-pound weight feels heavier than a 10-pound weight, but not twice as heavy).
Now a team of researchers led by Christopher K. Hsee (University of Chicago, Graduate School of Business) has identified a number of other reasons why people may value things differently depending on their quantity. In their article “When Is More Better: On the Relationship Between Magnitude and Subjective Value,” in the October 2005 issue of Current Directions in Psychological Science, Hsee, Yuval Rottenstreich (Fuqua School of Business, Duke University), and Zhixing Xiao (China Europe International Business School) show that the circumstances under which evaluation takes place and the particular manner in which people make their evaluations powerfully affect the subjective value they place on things.
Evaluations are different, first of all, depending on whether people are guided more by their feelings or by calculation. In one study, the authors asked participants how much they would donate to save either one or four endangered pandas. In one group, the pandas were represented by cute panda pictures, encouraging participants to make their judgments based on their feeling about pandas; in the other group, the pandas were represented by dots, encouraging “colder” calculation.
As the researchers expected, the participants who were shown dots were willing to donate significantly more to save four pandas than they were to save just one panda — evaluating by calculation made the group magnitude-sensitive, in other words. The group shown panda pictures, who evaluated by feeling, were magnitude insensitive, donating no more to save four pandas than to save one.
People are also affected in the value they place on things by their prior knowledge, and whether or not they judge objects in isolation or in juxtaposition with other objects for comparison.
A traveler shopping for jade jewelry in Asia who examines a 10-carat stone may, if he knows nothing about jade jewelry or how it is valued by weight, place a similar value on it to the value placed, in another store, by a similarly ignorant shopper, on a 15-carat stone. Lack of background knowledge makes these pieces of jade jewelry inevaluable; and lack of evaluability, like judgments based solely on feeling, will cause valuations to be relatively magnitude insensitive.
On the other hand, being able to compare two pieces side by side, or else possessing the necessary background knowledge to evaluate single pieces in isolation causes shoppers to be relatively sensitive to magnitude (i.e., weight).
This research has big implications for human motivation. The authors point out that, quite often, the big decisions we make — not just purchases, but life decisions such as jobs — occur in contexts that promote calculation and comparison — and thus, sensitivity to magnitude, and the corresponding assumption that “more is better.” Yet this may not always be a good thing.
“Suppose someone must choose between a job paying $60,000 and a second, more tedious job paying $70,000,” the authors write. “In choosing, this person will likely be sensitive to salary magnitude ... The person may therefore opt for the higher-paying job ...”
The problem is that we generally experience the fruits of our decisions in a very different mindset from the one we were in when we made them. The tedium of the $70,000 job will probably make the worker unhappy, despite the salary she is receiving.
Since daily life (as opposed to decision time) generally promotes valuation by feeling, without the benefit of comparison to some alternative, our magnitude-sensitive decisions may make us unhappy in our magnitude-insensitive daily lives. The authors conclude that, “in decision making, more often seems better, yet in life, more is often not better.”
