Lone Gunman

When requested to give up a “sacred value”, the inclu­sion of a finan­cial incen­tive incites moral out­rage, decreases gen­eral sup­port for a com­pro­mise, increases anger and increases a subject’s approval of “vio­lent opposition”.

Research look­ing at our reac­tions to such pro­pos­als offers same sug­ges­tions for nego­ti­at­ing over sacred val­ues.

A more suc­cess­ful tack for nego­ti­at­ing over sacred val­ues, as it turns out, is to sim­ply use the right words. Whether dis­cussing nuclear dis­ar­ma­ment or reluc­tance to sell one’s lucky mug at a garage sale, using spe­cific rhetor­i­cal strate­gies can make trade-offs seem less taboo and can facil­i­tate con­flict res­o­lu­tion. […] One tac­tic is to describe trade­offs in terms of “costs and ben­e­fits” and “analy­sis” rather than in terms of sacred val­ues and money. This vague util­i­tar­ian lan­guage appears to mask the emotion-laden taboo nature of the exchange. Another strat­egy is to empha­size the dire, oblig­a­tory nature of the trade-off. For exam­ple, peo­ple are more will­ing to sell their body organs for med­ical trans­plants when told it is the only way to save lives because this fram­ing posits the exchange as one sacred value for another. In an age where many of the most volatile con­flicts stem from sacred causes, and politi­cians have ques­tioned effec­tive­ness of diplo­macy, under­stand­ing how to best nego­ti­ate about these issues has never been more critical.

via Schneier on Security

It’s not sur­pris­ing to dis­cover that in an exper­i­ment look­ing at how taxes and sub­si­dies can be used to influ­ence health­ier food pur­chases it was the tax­ing of unhealthy food that improved choices, not the sub­sidi­s­a­tion of healthy options.

Strangely, though, it turns out that the health food sub­si­dies actu­ally wors­ened choices (the study the­o­rises that the shop­pers used the ‘saved’ money to treat them­selves, while still pur­chas­ing the unhealthy goods).

Taxes were more effec­tive in reduc­ing calo­ries pur­chased over sub­sides. Specif­i­cally, tax­ing unhealthy foods reduced over­all calo­ries pur­chased, while cut­ting the pro­por­tion of fat and car­bo­hy­drates and upping the pro­por­tion of pro­tein in a typ­i­cal week’s groceries.

By con­trast, sub­si­diz­ing the prices of healthy food actu­ally increased over­all calo­ries pur­chased with­out chang­ing the nutri­tional value at all. It appears that moth­ers took the money they saved on sub­si­dized fruits and veg­eta­bles and treated the fam­ily to less healthy alter­na­tives, such as chips and soda pop. Taxes had basi­cally the oppo­site effect, shift­ing spend­ing from less healthy to health­ier choices.

via Nudge

On dis­cussing why he and his co-founders are seek­ing ven­ture cap­i­tal fund­ing for their pro­gram­ming ques­tion and answer site (Stack­Over­flow), Joel Spol­sky pro­vides a num­ber of sce­nar­ios for when a com­pany should give con­sid­er­a­tion to VC fund­ing:

1. There’s a land grab going on.
2. There is a prov­able con­cept that’s repeatable.
3. The busi­ness could ben­e­fit from the pub­lic­ity of get­ting an invest­ment from some­one who is thought of as being a savvy investor.
4. The investor will add sub­stan­tial value to the busi­ness in advice, con­nec­tions, and introductions.
5. The busi­ness can poten­tially have a big exit or become a large, pub­li­cally traded company.
6. The founders are happy to give up some con­trol to make the busi­ness more successful.

And when a com­pany should not con­sider it:

1. The founders are risk-averse and are will­ing to trade a much smaller pay­out for lower risk.
2. The founders are tech­ni­cal with­out sub­stan­tial busi­ness expe­ri­ence and wish to main­tain absolute con­trol forever.
3. If the investor is mostly “dumb money.”
4. If you’re going into an estab­lished field with a lot of competition.
5. If the prod­uct is imma­ture and unproven.
6. If the founders don’t have enough of the right kinds of indus­try con­nec­tions, or the idea is not com­pelling enough, so that rais­ing VC would take months or years
7. If there is any other way to raise the kind of money you need.

A num­ber of pieces have been writ­ten dis­agree­ing with Spolsky’s arti­cle, sug­gest­ing that either Stack­Over­flow does not fit these cri­te­ria or that the rea­son­ing is just plain wrong. 37signals’ post cov­ers both.

In a series of novel fram­ing experiments, researchers have shown that our self-identified polit­i­cal lean­ings cor­re­late with how we per­ceive finan­cial losses.

Hun­dreds of online par­tic­i­pants chose between var­i­ous flights, com­put­ers and so on. In each case they could plump for a cheaper option or a more expen­sive, greener option, the lat­ter includ­ing either a ‘tax’ to help reduce car­bon emis­sions, or an ‘off­set’ to do the same – depend­ing on how the choice was framed. Whether the expen­sive option was framed as a tax or off­set made no dif­fer­ence to Demo­c­rat (left-wing) par­tic­i­pants. By con­trast, Repub­li­cans (right-wing) and Inde­pen­dents were much less likely to choose the more expen­sive option when it was labelled as a tax.

Large bonuses and salaries are in place to attract prime tal­ent and as an incen­tive to improve per­for­mance, goes con­ven­tional wis­dom and the bankers’ rhetoric. However recent research by Dan Ariely (author of Pre­dictably Irra­tional) and col­leagues sug­gests that while large pay will attract the best tal­ent, large performance-based bonuses may hin­der supe­rior per­for­mance.

Inter­est­ingly big bonuses suc­ceeded in increas­ing per­for­mance only when the tasks under­taken were mechan­i­cal in nature (e.g. tap­ping a key as fast as pos­si­ble) but not when they were cog­ni­tive. When tasks were con­ducted in pub­lic (pub­lic scrutiny as a task moti­va­tor), per­for­mance did increase.

Like money, social pres­sure moti­vates peo­ple, espe­cially when the tasks require only effort and not skill or think­ing. But at some point, too much of it over­whelms the moti­vat­ing influence.

If our tests mimic the real world, then mas­sive bonuses clearly don’t work. They may not only cost employ­ers more but also dis­cour­age exec­u­tives from work­ing to the best of their abil­i­ties. The finan­cial cri­sis, per­haps, didn’t hap­pen in spite of the bonuses, but because of them.