Tag Archives: ryan-sager

Corrections and When They Work

A correction only serves its purpose (to correct our falsely-held beliefs) if we are predisposed to believe the correction itself. If we disagree with the correction, however, it instead acts to actually reinforce our incorrect beliefs (the “backfire effect”).

That’s the conclusion drawn from research conducted by Brendan Nyhan, looking at how we avoid cognitive dissonance in the face of corrective information (pdf).

Brendan’s research on cognitive dissonance and corrections has been nicely summarised by Ryan Sager in a couple of posts: one that looks briefly at the effect of corrections on misinformation, and another looking in great detail at the roots of the anti-vaccine movement.

We find that responses to corrections in mock news articles differ significantly according to subjects’ ideological views.  As a result, the corrections fail to reduce misperceptions for the most committed participants. Even worse, they actually strengthen misperceptions among ideological subgroups in several cases. […]

Test subjects read mock news articles featuring misleading statements about well-known but ideologically contentious subjects such as the presence of weapons of mass destruction in Iraq prior to the U.S. invasion. Half of their subjects read articles including only the misleading statements; half read articles that also included a correction.

By comparing the two groups of respondents, [it was] determined that the ideology of the subjects tended to predict reactions. Efforts to correct misperceptions were more likely to succeed among those ideologically sympathetic to the correction, such as liberals to the notion that WMD were never found in Iraq after Saddam Hussein was deposed. But the corrections tended to “boomerang” among those ideologically predisposed to believe the erroneous information. Thus, conservative subjects who had read the correction were even more.

Every article Sager points to in these posts is worth reading, especially Is Health Care Turnaround a Bad Bet?, How Facts Backfire and Persistence of Myths Could Alter Public Policy Approach.

The Deadweight Loss of Gift Vouchers

Of the $92 billion spent on gift vouchers in the U.S. last year, $6 billion was lost to fees and unused cards. In response to this, the U.S. Credit Card Act now bans fees on vouchers that have been dormant for less than 12 months and expiration dates of less than five years from the date of purchase.

The problem is, according to research on how we use vouchers, this is the opposite of what’s needed to prevent an increase in the deadweight loss of gift vouchers.

Ryan Sager explains:

While these are intended as pro-consumer reforms, they’re based on a misunderstanding of the real problem with gift cards: You lose money on them not primarily because of fees or expiration dates, but because you throw them in a drawer and forget about them. Or, you lose them, or you hold on to them indefinitely — always thinking you’ll redeem them tomorrow.

It’s counterintuitive, but the way to make people more likely to redeem their gift cards would be to shorten the time before they expired.

Sager points to two studies that corroborate this assumption: one indirectly, showing that city residents are less likely to see ‘the sights’ of that city than tourists with limited time; and another directly, conducted on students with obviously twisted priorities:

64 undergraduates [were given] coupons for a slice of cake and a beverage at a local French pastry shop. Half got a certificate that expired in three weeks, half got one that expired in two months. While students were sure they were more likely to use the certificate with the more generous timeframe, the results were clear: The shorter timeframe made the students much more likely to redeem their certificates; 10 of the 32 students (31%) redeemed the three-week certificates, only two of the 32 students (6%) redeemed the two-month certificates.

Long-time readers may recall Joel Waldfogel’s research on the inefficiencies of Christmas gift-giving: a deadweight loss of 10%, resulting in a $4 billion loss to the US economy every year.

In that article, Tim Harford suggested small and sentimental gifts as ideal, warning against gift vouchers as “they have no sentimental value but still create deadweight loss, since many expire without being used, or are sold at a loss”.

You have been warned.