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Chip Heath Professor of Organizational Behavior
Research Interests Why do certain ideas
succeed in the social marketplace of ideas? How do individuals,
groups, and organizations make important decisions, and what mistakes do
they make? Papers
Why do certain ideas succeed in the social “marketplace of ideas”? The research papers in this section consider why certain ideas, stories, frameworks, and beliefs survive in social life.
A idea habitat is a set of cues in the environment that remind people to think of a particular idea. Ideas are more successful when they are cued by the environment more often -- to take a simple example, the proverb “April showers bring May flowers” will be recalled and recited more often in years when there are more spring showers and flowers. The paper looks at the success of ideas including policy legends, rumors, political catchphrases, and Murphy’s Law.
The same disease can be named “Mad Cow” (a vivid, concrete, emotional label) or with a scientific name such as BSE or Creutzfeldt-Jacob (pallid, abstract, unemotional labels). The label matters. In a longitudinal study in France, people ate less beef when there was more media attention to “Mad Cow”, but people didn’t eat less beef when the media covered the same disease under scientific labels. A lab study shows that that the Mad Cow label makes people respond more emotionally and less rationally than the scientific labels. But in the marketplace of ideas, the Mad Cow label wins handily--it is twice as common in newspapers and six times more common on the internet.
Popular culture has embraced the Mozart Effect, the idea that babies and children become smarter when they listen to classical music, particularly Mozart’s. You can buy Mozart CDs and videos to make your child smarter and several states have passed legislation to ensure that kids in their state listen to Mozart. But scientific research has not supported the Mozart Effect. In this paper we show how the idea of the Mozart Effect started in a scientific study of college students but then became distorted into a story about making babies and children smarter. The Mozart Effect is mentioned more in the popular media of states that have problems with their educational system. Thus, the Mozart Effect seems to diffuse, in part, because it looks like a simple solution to a serious social problem. Similarities to fad diets, management practices, educational techniques, and medical treatments are probably coincidental.
Bogus rumors and legends are often attributed to credible authorities--police departments, experts, government agencies. This paper shows that these credibility appeals may evolve unconsciously. When people believe an idea, they’re likely to mis-remember that they saw it in a credible source (e.g., Consumer Reports versus an internet site).
Good word of mouth requires a simple, compelling argument. Stock clubs and individuals select stocks from the same universe of choices, but members of clubs have to convince each other to buy a stock whereas individuals need only convince themselves. This paper shows that stock clubs tend to choose stocks that have a compelling rationale that is easy to communicate. Unfortunately, those compelling rationales don’t lead to better stock-picking performance.
Ideas may be selected in the social marketplace of ideas because they pack a powerful emotional punch. Lab experiments show that people are more likely to pass along legends that are strongly emotional, even after holding constant their truth, practical value, and entertainment interest. Changing a legend to make it more emotional makes it more likely to be passed along. A survey of legends on the internet reveals that emotional urban legends are more widely distributed. Truth doesn’t always win out in the “marketplace of ideas,” sometimes emotion does.
People like to pass along reasonable information to others, but surprising information is also attractive. People are more likely to pass along surprising information that matches the emotional tone of a domain--for example, students who attend a university in a rough neighborhood are more likely to pass along surprisingly bad news about the severity of muggings in their neighborhood and their own likelihood of being a target.
How do individuals, groups, and organizations make important decisions, and what mistakes do they make?
Decisions in organizations We think more highly of ourselves than we should, and our tendency to overestimate our abilities causes problems for how we take care of our health, how we educate ourselves, and how we run our businesses. A condensed summary of this review paper can be found in: Dunning, Heath & Suls (2005). Picture Imperfect. Scientific American: Mind
Managers often complain that their employees are too risk-averse. This paper explores one situation where managers incorrectly accuse their employees of being risk-averse, despite the fact that the employees are taking a more reasonable approach than the managers.
Here are three ways of thinking about what organizational behavior researchers should study. This paper includes a survey of under-studied topics by top researchers.
Coordination is one of the two fundamental problems of organizing. But when people design organizations they make all kinds of mistakes that end up hindering coordination. Our review of common mistakes is illustrated with cases including automobile manufacturing, the discovery of Nylon, the Tower of Babel, submarine warfare, and why software projects always take longer than anyone expected.
We think others are motivated more by pay, benefits, and other extrinsic rewards than we are ourselves. This is a mistake. This paper documents this mistake and talks about how it will affect the second fundamental problem of organizing: the agency problem of aligning the goals and motivations of everyone in an organization.
Research has documented all kinds of problems that individuals have in making effective decisions--we consider a narrow range of alternatives and collect a limited sample of evidence, but then we draw overconfident conclusions from our work. In this paper we review the literature on these problems and then talk about how organizations develop routines and procedures that may mitigate them. Illustrations come from TQM, Microsoft, the Pentagon, engineering practices, and Wall Street traders.
Individual and group decisions Employees typically exercise their stocks too early, sacrificing a great deal of money. This paper investigates psychological reasons this might happen. One is a reference point problem: people are particularly likely to exercise when stock prices cross a peak that has happened in the previous year.
This paper shows how goals motivate us to act. In the paper, we link the I/O literature on goals with the cognitive literature on reference points. Goals motivate because they force us to feel we’re at a “loss” relative to our goal-induced reference point. Because losses loom larger than gains, we work harder to work our way out of a loss than to acquire a gain.
On a series of challenging set of tasks, the majority of individuals thought they performed below average, but the majority of groups thought they performed above average. Both are statistical impossibilities. But the optimistic reactions of groups suggest that groups play an important role in motivation. Individuals often get demoralized when tackling difficult tasks alone, but group interaction helps buffer individuals from difficulties and setbacks.
Heath, Chip & M.G. Fennema (1996). Mental depreciation and marginal decision making. Organizational Behavior and Human Decision Processes, 68, 95-108. Heath, Chip (1995). Escalation and de-escalation of commitment in response to sunk costs: The role of budgeting in mental accounting. Organizational Behavior and Human Decision Processes, 62, 38-54. These three papers explore mental accounting--how we mentally budget our resources and track our expenses. Mental budgeting sometimes leads to mistakes--we may abandon a promising project because we feel we’ve invested too much even when an additional investment would produce a high payoff. In the Heath & Fennema study, college students paid three times more than they should for some of their meals because their mental accounting systems led them awry.
We frequently talk to others before we make an important decision. Talking helps us rehearse a rationale for our decisions and makes our decision seem more plausible even if it’s not really better. Talking makes us more confident but not necessarily more accurate.
Most uncertain decisions feature ambiguous probabilities. We might say a sports team has a 50% chance of winning, but that’s more ambiguous than a 50% chance of heads on a coin flip. The famous Ellsberg paradox in economics suggested that people avoid betting on ambiguous prospects, but we show that when people feel expert in a domain, they may prefer ambiguity; a sports fan prefers betting on the 50% sports prediction over the 50% coin flip. We suggest how this preference might explain several puzzles: e.g., why managers take risks without seeing them as risky, and why investors might under-diversify and favor stocks such as their own company that don’t provide good diversification.
Teaching Interests Frontiers of Social Innovation This is a seminar course where students create case studies of socially innovative organizations that are doing good for the world for publication in Stanford’s Social Innovation Review. See below for sample articles from previous classes:
Laura Beaudin, "From Marble to Formica" (Union Bank of California) Noah Weiss, "Government by Numbers" (CitiStat in Baltimore) Dryer & Pizzo, "Secret Agents" (Method products) Oudsema & Wedell, "Unselling Meth" (Montana Meth Project) Jessica Flannery, "Micro-Franchise Against Malaria" (HealthStore Foundation)
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