The Why Axis

1. Field experiments reveal hidden motives behind human behavior

To get at the real underbelly of human motivation, we run experiments in the wild, where we can observe people going about their business in their natural environments when they're not aware that they're being observed.

Uncovering true motivations. Field experiments allow researchers to observe real-world behavior without the artificial constraints of laboratory settings. By studying people in their natural environments, economists can identify the actual incentives and motivations driving human actions. This approach has revealed surprising insights into areas like discrimination, charitable giving, and consumer behavior.

Beyond assumptions and correlations. Traditional economic research often relies on assumptions or correlations that may not reflect causality. Field experiments provide a scientific method to test hypotheses and establish causal relationships. For example, experiments have shown that:

• People respond differently to gains versus losses
• Social norms can be as powerful as financial incentives
• Default options significantly influence decision-making

2. Incentives shape outcomes, but must be carefully designed

If you want people to do what you want, incentives can be incredibly handy. When you were little and your mom promised you a toy for cleaning your room, you probably cleaned your room.

Unintended consequences. Poorly designed incentives can backfire or produce unexpected results. The authors found that fining parents for late daycare pickups actually increased late pickups, as it removed the social stigma and replaced it with a simple economic transaction. Similarly, paying people small amounts for tasks they would otherwise do for free can reduce motivation.

Effective incentive design. To create successful incentive systems:

• Consider both financial and non-financial rewards
• Frame incentives as potential losses rather than gains when appropriate
• Align incentives with intrinsic motivations
• Test different approaches using small-scale experiments before full implementation

3. Women's competitiveness is influenced by culture, not biology

When the right kinds of incentives are applied via the scientific method, poor kids can do just as well as rich kids within ten months.

Cultural influences on gender. Field experiments in patriarchal and matrilineal societies revealed that women's competitiveness is largely shaped by cultural factors, not innate biological differences. In matrilineal societies, women were more competitive than men, contradicting the common assumption that men are naturally more competitive.

Implications for gender equality. To address gender gaps in labor markets and leadership positions:

• Challenge cultural assumptions about gender roles
• Provide early exposure to competitive environments for girls
• Design systems that don't penalize women for family responsibilities
• Encourage women to negotiate and compete for opportunities

4. Early childhood education can close achievement gaps rapidly

When the right kinds of incentives are applied via the scientific method, poor kids can do just as well as rich kids within ten months.

Powerful interventions. Field experiments in Chicago schools demonstrated that well-designed early childhood education programs can rapidly close achievement gaps between disadvantaged and affluent students. Key factors include:

• High-quality preschool curricula
• Parent involvement and education
• Incentives for both students and parents

Long-term benefits. Early interventions have lasting effects:

• Improved cognitive and non-cognitive skills
• Higher high school graduation rates
• Better long-term economic outcomes
• Reduced likelihood of criminal behavior

5. Modern discrimination is often driven by economic motives

I don't really hate you, I just like money.

Economic vs. animus-based discrimination. Field experiments revealed that much modern discrimination is driven by economic motivations rather than pure prejudice. For example, car dealers charged higher prices to minorities not out of hatred, but because they believed these customers were less likely to shop around.

Addressing economic discrimination:

• Increase transparency in pricing and decision-making
• Educate consumers about potential discrimination
• Design policies that address economic incentives, not just prejudice
• Encourage businesses to use data-driven approaches to avoid unintentional bias

6. Charitable giving is motivated by self-interest and social factors

Don't appeal to people's hearts; appeal to their vanity.

Beyond altruism. Field experiments in charitable giving revealed that donors are often motivated by factors beyond pure altruism:

• Social recognition and status
• Reciprocity (feeling obligated to give when receiving something)
• Warm glow effect (feeling good about oneself)

Effective fundraising strategies:

• Use social proof (show that others are donating)
• Offer small gifts or tokens of appreciation
• Provide opportunities for public recognition
• Frame donations as potential losses (e.g., "Don't miss this chance to help")
• Use lotteries or competitions to increase engagement

7. Business experimentation leads to increased profits and innovation

Do you want to make more money? If yes, then run field experiments. Do you want to go down in the annals of great companies? If you do, then run field experiments.

Data-driven decision making. Companies that embrace field experiments can make better decisions, increase profits, and drive innovation. Examples include:

• Intuit's rapid experimentation culture leading to new product features
• Disney optimizing pricing strategies for photos at theme park rides
• Wanlida increasing factory productivity through incentive framing

Implementing experimentation:

• Create a culture that values testing and learning
• Start with small-scale experiments before full implementation
• Use randomization to establish causality
• Measure outcomes rigorously and be willing to act on results
• Encourage employees at all levels to propose and run experiments

Last updated: October 17, 2024