Happiness, Psychological Immune Systems, and Sesame Street

1. Happiness, Psychological Immune Systems, and Sesame Street

2. Utility Again: utility is the subjective (or personal) form of expected value (EV). * The disutility (unhappiness) caused by a loss ordinarily exceeds the positive utility (happiness) provided by a gain of equal size. e.g., “even-Steven” games of chance are unpopular; most won’t play them e.g., which emotion is stronger? winning or losing by a close margin (Supreme Court cases, aftermaths of presidential elections)

3. Utility Hence, people generally tend to be risk-averse. e.g. - dating at UofR: why relatively little of it? more of it among freshmen than seniors? - “limited liability” laws for investors: made capitalism possible The “law of diminishing marginal utility”: the increase in utility from any gain is inversely proportional to what you already have: e.g., In other words, a $10,000 gain to Bill Gates is far less satisfying to him than the same gain to someone whose income is $25,000. (Still, a $10,000 loss to Gates is more painful to him than a $10,000 gain, and a $10,000 loss to the person whose income is $25,000 is absolutely devastating.) Beyond a certain threshold, “as a rich person gets richer, each additional unit of wealth satisfies them less and less.” (the “preschool candy-bar” experiment) * Catch: The vast majority of people forget or don’t know this and other related principles.

4. Utility: The Futile Pursuit of Happiness Expected Utility (EU)=LW x SPP • Gilbert, Wilson, Loewenstein, & Kahneman: “We consistently misestimate the intensity andduration of something’s utility; this is known as the ‘impact bias’.” Our ability to predict the emotional consequences of a decision, purchase, or event is less than we think. Rolling Stones: Instead of “you can’t always get what you want,” it’s more like “you can’t always KNOW what you want.” • Our mistakes of expectation can lead directly to mistakes in choosing what we think will give us pleasure. We often “miswant.” • Key role of “adaptation” to good things and “resilience” to bad things. our “psychological immune system” (a sort of emotional “thermostat”) e.g., remember your family’s first dial-up 14,400 baud modem or cell phone w/75 daytime minutes or first Hotmail/Yahoo account OR your first “break up” in high school or rejection?

5. Utility: The Futile Pursuit of Happiness Utility estimation errors made in “hot” and “cold” states of rationality. e.g., Vanilla Ice’s “Ice Ice Baby” dance experiment, unsafe sex, angry email “Peak-End” phenomenon What we remember about the pleasurable quality of our past experiences is primarily determined by two things: (1) how an experience felt it was at its peak (best or worst), and (2) how it felt when it ended. e.g., colonoscopy experiment to predict the follow-up rate

6. Happiness and the Tyranny of Choice “Choices” follow similar utility principles as chocolate bars and increases in wealth: the utility—the increase in happiness—from the first couple is large and infinitely better than no choices, but . . . Excessive Choice is often burdensome (psychologist Barry Schwartz). Why? • Increases burden of information gathering to make a wise decision • Doing all the “cost-benefit/expected utility” calculations is exhausting • Increases expectations about how good the decision will be (food, college, job, etc.) • People often assemble an idealistic composite of all the options foregone • Which increases the likelihood that they will regret the decision they make • And increases the chance that they will blame themselves when a decision fails to live up to expectations. Perhaps colleges/universities offer too many choices now, which might help explain double-, triple-majoring, etc.

7. Happiness and the Tyranny of Choice “Starter Marriage” phenomenon Census Bureau: 3 million divorced 18-29 year-olds (1999) 253,000 divorced 25-29 year-olds (1962) Atul Gawande, M.D. & cancer study - 65% of people surveyed say that if they were to get cancer, they would want to choose their own treatment; of those who do get cancer, though, only 12% actually want to choose Steven Venti, Dartmouth economist & Employer 401k plans The more funds employers offer their employees in 401k plans, the less likely the employees are to invest in any of them. Failure of “Voluntary Medicare Rx Drug Discount Cards” Too many choices and too complex for most senior citizens. “Wine Warehouse” vs. “Gas Station” experiences Depression and Happiness Surveys Growth in material affluence has not been matched by an equal growth in personal happiness. The number of Americans describing themselves as “very happy” has declined by 5% since mid-170s, which means that 14 million fewer people report being “very happy” today than in 1975. Conversely, JAMA recently reported that the rate of serious clinical depression has more than tripled over the last two generations.

8. Combating the “Paralysis of Choice” Helpful countermeasures: (1) Group Decision-Making Political Scientist Paul Johnson’s research: - He asks his classes of roughly 25 students to predict who will win the Academy Award in several leading categories. - He has consistently found that the group predictions are better than the predictions of any one individual. In 1998, the group picked 11 of 12 winners, while the average individual in the group picked only 5 of 12 winners (and the single best individual picked only 9 winners). (2) Pro-Actively Limit Choices to “1st order,” “2nd order,” “3rd order,” etc. (3) Counterfactual Downward (4) Make Some Decisions Nonreversible (e.g., Harvard photography class) (5) Anticipate Adaptation (6) Learn to Love Constraints (Say “No”)

9. The “Stickiness” Factor • Sesame Street as an “educational virus” that triggered a learning epidemic • The “stickiness” of a message is a measure of how memorable it is. e.g., Yale University tetanus shot experiment and the “clutter problem” e.g., UR’s 2005 “be careful when walking” email after it snowed

10. The “Stickiness” Factor & Sesame Street • Kids don’t watch t.v. when they are stimulated and look away when they’re bored. They watch when they _________ and they look away when they’re __________. • Sesame Street’s innovative blend of Muppets and adults grew out of a desperate desire to be sticky. • each show’s “success” was based on eye-tracking research