September 13, 2009 by sean.

UCLA researchers explore the SCARF dynamic [status, certainty, autonomy, relatedness, and fair treatment], how high intelligence often corresponds with low self-awareness, and how attempts to hide feelings often trigger threat responses [via Strategy+Business]:

Eisenberger’s fellow researcher Matthew Lieberman, also of UCLA, hypothesizes that human beings evolved this link between social connection and physical discomfort within the brain “because, to a mammal, being socially connected to caregivers is necessary for survival.” This study and many others now emerging have made one thing clear: The human brain is a social organ. Its physiological and neurological reactions are directly and profoundly shaped by social interaction. Indeed, as Lieberman puts it, “Most processes operating in the background when your brain is at rest are involved in thinking about other people and yourself.”

This presents enormous challenges to managers. Although a job is often regarded as a purely economic transaction, in which people exchange their labor for financial compensation, the brain experiences the workplace first and foremost as a social system. Like the experiment participants whose avatars were left out of the game, people who feel betrayed or unrecognized at work — for example, when they are reprimanded, given an assignment that seems unworthy, or told to take a pay cut — experience it as a neural impulse, as powerful and painful as a blow to the head. Most people who work in companies learn to rationalize or temper their reactions; they “suck it up,” as the common parlance puts it. But they also limit their commitment and engagement. They become purely transactional employees, reluctant to give more of themselves to the company, because the social context stands in their way.

Posted in behavioral economics, psychology, neuroscience | No Comments »

August 26, 2009 by sean.

Posted in behavioral economics, psychology, learning theory | No Comments »

July 19, 2009 by sean.

Posted in behavioral economics, psychology, work | No Comments »

May 6, 2009 by sean.

Researchers at Princeton discover correlations between cognitive skills, economic preferences and strategic behavior [via Proceedings of the National Academy of Sciences of the USA]:

Economic analysis has so far said little about how an individual’s cognitive skills (CS) are related to the individual’s economic preferences in different choice domains, such as risk taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings.

First, there is a strong and significant relationship between an individual’s CS and preferences. Individuals with better CS are more patient, in both short- and long-run. Better CS are also associated with a greater willingness to take calculated risks.

Second, CS predict social awareness and choices in a sequential Prisoner’s Dilemma game. Subjects with better CS more accurately forecast others’ behavior and differentiate their behavior as a second mover more strongly depending on the first-mover’s choice.

Third, CS, and in particular, the ability to plan, strongly predict perseverance on the job in a setting with a substantial financial penalty for early exit.

Consistent with CS being a common factor in all of these preferences and behaviors, we find a strong pattern of correlation among them. These results, taken together with the theoretical explanation we offer for the relationships we find, suggest that higher CS systematically affect preferences and choices in ways that favor economic success.

Posted in behavioral economics, psychology | No Comments »