RESEARCH PAPERS
Uncertainty Increases Motivation
Luxi Shen, Ayelet Fishbach, and Christopher K. Hsee [job market paper, email for copy]
Can a reward of an uncertain magnitude be more motivating than a reward of a certain magnitude? This research finds that people invest more effort, time, and money to qualify for an uncertain reward (e.g., a 50% chance at $100 and a 50% chance at $50) than a certain reward of a higher expected value (e.g., a 100% chance at $100). Uncertain rewards increase motivation because uncertainty increases excitement in the process of pursuing a reward. A series of studies, involving real behaviors and real consequences, documented that participants were more motivated when working towards an uncertain (vs. a certain) reward, and that this effect occurred when they focused on the process rather than the outcome of the activity. These findings have theoretical implications for risk preference and motivation theory, and practical implications for designing incentives in various marketing contexts.

 

The Uniqueness Heuristic: A Preference for Unique Options for a Single Goal
Luxi Shen and Ayelet Fishbach [email for copy]
We document a “uniqueness heuristic” in consumer choice: a preference for unique choice options when pursuing a single goal. When choosing for a single goal, consumers prefer a unique option that is infrequent within its choice set (e.g., a red apple in a bowl of green apples) or atypical to a category (e.g., an uncommon candy flavor). In addition, consumers choose a unique option when considering either Goal A alone or Goal B alone, but choose an ordinary option when considering both Goals A and B together, even if only one of the goals will be served. Specifically, we document a preference for infrequent options for a single occasion (Study 1), regardless of whether the occasion is special (Study 2). Perceived instrumentality of infrequent options for any single recipient (i.e., goal) underlies the preference for uniqueness (Study 3). Moving to atypical options, we document a preference for an atypical option for a single occasion and a preference for a typical option for one of several occasions (Study 4). Finally, in a field experiment on charitable giving, donors preferred an atypical donation for a single recipient and a typical donation for one of several recipients (Study 5).

 

The Power of Specious Numbers
Luxi Shen and Christopher K. Hsee [email for copy]
We introduce a minimalistic way to increase individuals’ efforts in an ongoing task, for example, working on an exercise machine. We propose and found that showing individuals a number that increases over time can motivate them to work harder on the task, even if the number is not tied to any rewards. We further propose and found that the motivational power of such an increasing number depends neither on its magnitude nor on its speed, but on whether it accelerates or decelerates: an accelerating number is more motivating. Theoretically this research sheds light on how people respond to changing numbers even if the numbers are normatively meaningless. Practically, the method suggested in this research (i.e., showing people an accelerating number) is a virtually costless way to increase efforts and can be potentially applied to a wide range of tasks.

 

Making Sense of Nonsense: The Visual Salience of Units Determines Sensitivity to Magnitude
Luxi Shen and Oleg Urminsky
Psychological Science (2013) [view copy]
When are people sensitive to the magnitude of numerical information presented in unfamiliar units, such as a price in a foreign currency or a measurement of an unfamiliar product attribute? We propose that people exhibit deliberational blindness, a failure to consider the meaning of even unfamiliar units. When an unfamiliar unit is not salient, people fail to take their lack of knowledge into account, and their judgments reflect sensitivity to the magnitude of the number. However, subtly manipulating the visual salience of the unit (e.g., enlarging its font size relative to the font size of the number) prompts recognition of the unit’s unfamiliarity and reduces magnitude sensitivity. In five experiments, we demonstrated this unit salience effect, provided evidence for deliberational blindness, and ruled out alternative explanations, such as nonperception and fluency. These findings have implications for decision making involving numerical information expressed in both unfamiliar units and familiar but poorly calibrated units.

 

Overpredicting and Underprofiting in Pricing Decisions
Luxi Shen, Christopher K. Hsee, Qingsheng Wu, and Claire I. Tsai
Journal of Behavioral Decision Making (2012) [view copy]
This research examines sellers’ price-setting behavior and discovers a naturally occurring mismatch between sellers and buyers: Sellers who make a price decision often consider alternative prices and engage in the joint evaluation mode, whereas buyers who make a purchase decision see only the finally set price and are in the single evaluation mode. This mismatch in evaluation modes leads sellers to overpredict buyers’ price sensitivity and underprice their products. However, these effects apply only to products unfamiliar to buyers and without salient reference prices and can be alleviated if sellers are encouraged to mimic single evaluation when making pricing decisions. These propositions are empirically tested and verified.

 

Fate or Fight? Exploring the Hedonic Costs of Competition
Christopher K. Hsee, Luxi Shen, Shirley Zhang, Jingqiu Chen, and Li Zhang
Organizational Behavior and Human Decision Processes (2012) [view copy]
As a resource-allocation method, free competition is generally considered more efficient and fairer than binding assignment, yet individuals’ hedonic experiences in these different resource-allocation conditions are largely ignored. Using a minimalistic experimental simulation procedure, we compared participants’ hedonic experiences between a free-competition condition (in which participants could equally and freely compete for the superior resource) and a binding-assignment condition (in which the superior and inferior resources were unequally and irreversibly assigned to different participants). We found that individuals in the binding-assignment condition -- even the disadvantaged ones -- were happier than those in the free-competition condition. We attributed the effect to individuals’ peace of mind, and supported the peace-of-mind notion by identifying two moderators: ease of social comparison and enjoyability of the inferior resource. In sum, this research highlighted the hedonic aspects of resource allocation methods and identified when accepting one’s fate is hedonically better than fighting for the best.

 

The Art and Science of Guessing
Luxi Shen, Christopher K. Hsee, Jiao Zhang, and Xianchi Dai
Emotion (2011) [view copy]
This research examined how one affectively reacts to others’ guesses at a value one cares about, such as one’s income. Conventional wisdom suggests that people will feel happier upon receiving more favorable guesses (e.g., higher income) than less favorable guesses. We found the opposite pattern. We propose a model to explain the effect and identify its boundaries and report experimental evidence for the model. This research enriches existing literature on self-enhancement and yields practical implications for how to approach guessing in interpersonal communications.

 

Wealth, Warmth and Well-being: Whether Happiness Is Relative or Absolute Depends on Whether It Is About Money, Acquisition, or Consumption
Christopher K. Hsee, Yang Yang, Naihe Li, and Luxi Shen
Journal of Marketing Research (2009) [view copy]
A central question in consumer and happiness research is whether happiness depends on absolute or relative levels of wealth and consumption. To address this question, the authors evaluate a finer level than overall happiness and distinguish among three specific types of happiness: with money, with the acquisition of an item, and with the consumption of an item. They find that happiness with money and with acquisition is relative and that happiness with consumption can be either absolute or relative, depending on whether the consumption is inherently evaluable or not. Including both lab and field data, this research yields implications for how to increase consumer happiness from one generation to the next.

 

 

BOOK CHAPTERS
The Explicit and Implicit Ways of Overcoming Temptation
Ayelet Fishbach and Luxi Shen
Dual Process Theories in the Social Mind, Jeffrey Sherman, Bertram Gawronski, and Yaacov Trope eds. (in press) [view copy]

 

 

ONGOING PROJECTS
"Uncertainty Seeking" with Christopher K. Hsee and Ayelet Fishbach.

 

"Good Luck as a Limited Resource" with Jane L. Risen and Eugene M. Caruso.

 

"No News Is Good News: Reinforced Risk Seeking with No Feedback" with Maferima Touré-Tillery and Ayelet Fishbach.

 

"Secrecy Increases Happiness" with Soraya Lambotte and Christopher K. Hsee.

 

 

CONFERENCE PRESENTATIONS
"The Uniqueness Heuristic" with Ayelet Fishbach.
  • Paper presentation at the Society for Consumer Psychology (SCP) Annual Conference, San Antonio, TX, February 2013.
  • Paper presentation at the Association for Consumer Research (ACR) Annual North America Conference, Vancouver, BC, Canada, October 2012.
  • Paper presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, Seattle, WA, November 2011.

 

"The Power of Specious Numbers" with Christopher K. Hsee.
  • Paper presentation at the Society for Consumer Psychology International (SCP Int'l) Conference, Florence, Italy, July 2012.
  • Paper presentation at the Society for Consumer Psychology (SCP) Annual Conference, Las Vegas, NV, February 2012.
  • Poster presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, Minneapolis, MN, November 2012.

 

"Making Sense of Nonsense" with Oleg Urminsky.
  • Paper presentation at the Association for Consumer Research (ACR) Annual North America Conference, St. Louis, MO, October 2011.
  • Paper presentation at the Society for Consumer Psychology (SCP) Annual Conference, Atlanta, GA, February 2011.
  • Poster presentation at the Judgment and Decision Making Preconference at the Society for Personality and Social Psychology (JDM pre-con at SPSP) Annual Conference, San Antonio, TX, January 2011.
  • Poster presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, St. Louis, MO, November 2010.

 

"The Art and Science of Guessing" with Christopher K. Hsee, Jiao Zhang, and Xianchi Dai.
  • Paper presentation at the Association for Consumer Research (ACR) Annual North America Conference, Jacksonville, FL, October 2010.
  • Paper presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, Boston, MA, November 2009.

 

"Overpredicting and Underprofiting in Pricing Decisions" with Christopher K. Hsee, Qingsheng Wu, and Claire I. Tsai.
  • Poster presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, St. Louis, MO, November 2010.

 

"Overestimating Consumers’ Sensitivity to Price Variation" with Christopher K. Hsee.
  • Poster presentation at the Society for Judgment and Decision Making (SJDM) Annual Conference, Long Beach, CA, November 2007.

 

 

 

The University of Chicago Booth School of Business   |   The University of Chicago