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Does Mindfulness Mean System 2?

3/9/2015

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Image source: Rewire Me 
In his book, Thinking Fast and Slow, Daniel Kahneman describes some of the many consequences of relying on System 1 thinking (or our intuitive, associative, and emotional thinking). There are many instances he cites where relying on our more deliberative, effortful, and rational System 2 would attenuate cognitive biases and result in more optimal decision-making. In covering some of the topics related to mental shortcuts and the biases caused by relying on System 1, a student in my BEDM course asked whether mindfulness could be a way to actively engage System 2. In the course of our conversation, this student also sent me two HBR articles discussing mindfulness.

One article, titled "Mindfulness Mitigates Biases You May Not Know You Have," talks about research showing that mindfulness can reduce implicit and associative biases. Implicit biases and attitudes are measured using the IAT (Implicit Attitudes Test - you can try taking one yourself here) and are automatic or associative thoughts and feelings we have about a target. Usually these attitudes have to do with prejudices or stereotyping, such as our feelings about certain races or sub-populations. The research discussed in this article specifically looked at implicit attitudes toward race and age, and found that participating in a 10-minute mindfulness exercise before taking the IAT reduced implicit bias towards these groups. These differences were significant, though the effect sizes were not exceptionally large. This study provides further evidence that engaging in mindfulness can reduce reliance on associative processing, and thereby diminish harmful implicit biases - something that could be especially valuable in the workplace, where hiring decisions and employee interactions may be harmfully impacted by automatically induced prejudices and biases.  

The second article, titled, "There are Risks to Mindfulness at Work" takes a completely different viewpoint. In this article, the author, David Brendel, argues that mindfulness can actually be misused as a strategy to avoid critical thinking. In other words, individuals may use mindfulness as a way to avoid critical thinking and making tough decisions, instead using mindfulness meditative strategies to disengage from the task and avoid the decision altogether. The problem here seems to be using mindfulness as an approach to dealing with all types of stress. When it comes to feelings of anxiety or burnout, I agree that mindfulness can be a helpful and simple approach for some individuals. But, engaging System 2 (more more effortful thought processes) can also increase feelings of stress and cognitive strain. These are not bad feelings - rather they are the normal feelings that accompany more critical and rational thinking - and they shouldn't be avoided (that is what relying on System 1 already does for us). If mindfulness is being used as a way to get more in touch with System 2, then it is a sound approach to decision-making; but if it is yet another strategy that individuals engage in to be "cognitively lazy" and avoid the strain and discomfort of System 2 thinking, then it should be avoided (and definitely not forced upon people as has become a practice in some workplaces). 

Ultimately, I think both articles highlight a potential tactic for reducing associative thinking that can be positive if applied correctly, and potentially negative if used incorrectly (as an avoidance tactic rather than a way to truly engage with difficult mental tasks). As mindfulness becomes more prevalent in our society and the workplace, I think it is important to keep in mind that cognitive strain isn't always bad, and that any tactic that moves you away from deliberative thinking can be harmful in arenas where such thinking is necessary or required.

Thank you to Karen Hübert for sharing!
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Tinder Tries Its Hand at Price Discrimination

3/6/2015

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Image source: www.buzzfeed.com
On Monday, Tinder announced Tinder Plus, which charges for premium features. Usually the introduction of a premium version of an app isn't exactly big news, but the company made a lot of interesting decisions regarding this paradigm shift. Raising prices in general is a difficult task -- people find it unsavory paying for something that was once free (see: loss aversion). But, with the right behavioral economic principles, a company can effectively raise price without concurrently causing outrage. Tinder is not such a company. Tinder has not only started charging for features that used to be free, but it has also decided to employ a tiered pricing program based on age (and it is using a rather arbitrary age cutoff at that). Tinder will be charging different prices to users who are aged 30 and older ($19.99), and to those who are under the age of 30 ($9.99). Tinder justified this pricing decision with the following statement to Bloomberg: "'Lots of products offer differentiated price tiers by age, like Spotify does for students, for example,' Rosette Pambakian, a spokeswoman for Tinder, wrote in an e-mail. 'Tinder is no different; during our testing we’ve learned, not surprisingly, that younger users are just as excited about Tinder Plus, but are more budget constrained, and need a lower price to pull the trigger.'" 

The first mistake Tinder made was initially charging nothing (thus, anchoring users on a free price point, and "free" holds special meaning to consumers). The second mistake it made was raising the price without directly tying it to only the addition of new/special features. The company should have left all features that were currently free as part of the free version, and only started charging for new or additional features (thereby justifying the price increase). The third mistake, and perhaps the company's worst, was charging more to older users for no good reason. It cites student discounts, but it should have then just had a discounted price relative to a standard base price that was the higher (30-and-above) price. People think student discounts are fair - we all understand that students are an income-constrained population and we generally see discounts to that group as acceptable. Plus, if this was really what Tinder was doing, the cutoff in age would be lower than 30 and they could arguably make even more profit this way. Since they didn't have pricing based on student membership, it seems that they are just unfairly "punishing" older users. Perhaps the company is trying to discourage people over 30 from using its app (maybe trying to force older users to its other platforms, okCupid and Match). So, either they are employing a strategy to get rid of older users, or they are completely out of touch with principles of fairness as they relate to consumer pricing. Either way, Tinder could have handled this announcement a lot better, and probably would find itself making a greater profit if it embraced social norms related to fairness. 

In general, it seems that people are very averse to the idea of price discrimination, especially when it is based on a demographic variable. This isn't to say that companies don't get away with it -- airlines, car services, and booksellers all engage in price discrimination everyday, and we consider volume-based pricing a standard tactic. The difference is that these are policies that consumers can "select into" and thus feel are more fair than policies that are based on something that consumers have no "control" over. If Tinder wanted to price discriminate, it should have found another way to do so, or, again should have reframed the issue (the standard price is $19.99 but students can receive a discounted price of $9.99). A quick review of headlines related to this announcement suggests that the public and Tinder users find this new pricing policy outrageous and unfair (which I think any of the students in my Behavioral Economics and Decision-Making class could have predicted):

  • Tinder Plus backlash? Not everybody likes new pay model
  • Tinder's age tax is just one small piece of online dating's massive age problem
  • For Thirtysomethings, It's Tinder That's Doing The Screwing
  • The Price Is Wrong: Why It Doesn’t Make Sense For Tinder To Charge People Older Than 29 More
  • Here's why Tinder's new paid service will cost more if you're old


Special thanks to Eliza Coleman for sharing!
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