Puzzling preferences

(featured image credit: A.H.M CC BY)

Are our preferences fixed, or can we change them at will?

Would you prefer a holiday for the advertised price, or the very same one for 25% less? Would you prefer spending half an hour doing the dishes every day, or five minutes loading and (when it’s done) unloading the dishwasher? Such preferences are simple, straightforward and unambiguous: we prefer not to spend more money than necessary on something, and the same applies to spending time.

The efficient allocation of resources like money and time is, perhaps, the most basic concern of economics, and indeed of human decision-making (which illustrates, in case it were necessary, why economics is such a fundamentally human topic of research). All else being equal, we prefer to spend the minimum possible resources in order to achieve a given goal. The reason is as simple as it is overwhelming: it means we have resources left over that we are free to spend on something else. Making the most efficient choice unequivocally leaves us better off. Yay!

A lot of human progress is mediated by this fundamental preference. Our distant ancestors discovered that hunting with weapons was more efficient than hunting with bare hands, and that storing water in earthenware vessels was more efficient than always having to walk to the spring or the river whenever they were thirsty.  More recent ancestors came up with the dishwasher. Late to the party (compared to other efficiency-enhancing devices like vacuum cleaners and washing machines), it is still enjoying increasing popularity (ownership in the UK is up from less than one-in-five households in the early 1990s to a whisper below one-in-two in 2018. (Ours broke down earlier this week, and we were promptly reminded of our preference).

Fluctuating preferences

But this is only part of the story about preferences. You like to-may-to, I like to-mah-to (although, other than in the Gershwins’ song, I have never heard anyone express a preference for po-tah-to), you prefer tea, your friend is a coffee lover. This is a trickier aspect for economists, because it is hard to measure this kind of preference objectively, but it doesn’t bother ordinary mortals much. Even if, one day, we prefer a beer with our dinner and the next a glass of wine, this not an issue. Subjective is perfectly fine for us: we know what we like, to paraphrase an old prog rock song.

No dishwasher for me, I know what my preference is! (photo: Francesca de Freitas CC BY)

Yet, there is something intriguing going on. In some cases, our preferences don’t just fluctuate from one moment to the other and back again, but change in a more permanent way. Fashion is an obvious example: looking at old photos or home movies reminds us of the hilarious preferences in clothing (were ties really that wide?) and haircuts (let’s not even go there) we used to have, and which are almost certainly never coming back.

But why did our preferences change? Did we wake up one morning and decide we did not like that style anymore? Social conformity bias or even peer pressure may well play a role where fashion is concerned. Conformity is one of the earliest topics of study in psychology. A classic experiment by Solomon Asch, a Polish-American psychologist goes back nearly seventy years. A group of eight people were asked in turn to answer a simple question (which of three lines matches the length of the line on a template). However, only the last person in the group was the real subject; unbeknownst to her or him, the other seven were actually the experimenter’s confederates. When these seven all answered the question incorrectly, about one-third of the time, the subjects also gave the wrong answer. Moreover, across all trials, around 75% of the participants gave the wrong answer at least once. Fifteen years earlier, Muzafer Sherif, a Turkish-American psychologist (who is probably better known for the controversial Robber’s Cave experiment), devised an experiment for his PhD dissertation, in which three participants had to estimate how far a dot of light projected in a totally dark room “moves”. (The movement is in fact an illusion brought on by the lack of reference: the dot did not actually move.) In every trial, the subjects naturally converged on a common estimate. One week later, the subjects were recalled individually, and their estimate of the (imaginary) movement remained conform to the common group estimate from a week earlier.

The preference to conform, to fit in with our in-group (or stand out from our out-group) seems to enjoy a higher priority than any aesthetic preference regarding our hair or our attire. And if the social norm of what is hot, and what is not, changes, our preference changes with it.

Deeper preferences

Yet we have other, deeper, preferences that change but perhaps not because everyone else’s changes. I bet you can list quite a few foods or drinks that you didn’t like when you were a child or an adolescent, and that you are rather partial to right now; and quite likely there are some that you liked in the past, but no longer at present. (We’re not talking about things you, for (self-)imposed health reasons, no longer consume, but still have a secret craving for: we’re talking not actually enjoying anymore.) The same may hold for stuff like music, books or TV shows, or even for holiday destinations.

Are these changes in preferences the result of a conscious effort? Probably not – it’s more likely that we are experiencing, on the one hand, a gradual process of an eroding preference (because it is being replaced with something new), and on the other hand specific opportunities to develop new ones (say, a cheese and wine evening where you try out a piece of Roquefort for the first time, and are at once smitten).

He’s sitting on my preferred spot, and I don’t care (photo: Armistead Booker CC BY)

What if we actually could actively alter some of our preferences? Many of them are clearly advantageous, so changing them would seem to be unwise. Efficient allocation of resources is one worth keeping – we’d need to be some kind of masochist (really!) to literally enjoy wasting time or money for nothing in return. Preferences that help us signal membership of a group, or tell others something about us that can be beneficial (e.g. we’re generous, wealthy, trustworthy etc.), too, are obviously worth maintaining as well. Others, like a taste for churros or cheesy chips, are perhaps, for obvious reasons, more maladaptive, and losing them might help us. But successfully unlearning such preferences with a strong physiological component, may well require a large dose of unpleasant brainwashing. There are more gentle ways toward healthy eating.

Imagined preferences

However, some preferences are entirely between our ears – they do not influence our lives in any material way. Some examples? A relative comes to stay, and promptly plonks himself down in our preferred spot on the sofa. That then becomes his default place for the duration, making us increasingly resentful. Or we have a colleague who is usually very tidy in her use of language, but who happens to be rather generous with expletives in team sessions, and we strongly prefer people not gratuitously pepper their speech with f- and c-words. A client systematically misspelling our name, one of our children having a, shall we call it, disorganized bedroom, or hair of a colour and a style that goes against our preferences (or, heaven forfend, a tattoo). You get the picture.

All of these can make us feel thoroughly annoyed and miserable. Why is this so – other than because we actually choose to have these preferences? What if it didn’t matter so much to us where exactly on the sofa we sit, or what people say or don’t say, how cluttered our kids’ bedrooms are, what colour their hair is, and so on?

Epicurus, the great Greek philosopher, taught us more than 2,300 years ago that we should seek to attain the state of ataraxia, being at peace with the world and free from suffering. Here we have a great opportunity to come a step closer to that ideal, by altering the preferences that seem to have no other function than to make us unhappy. Can we do it?

(Preferences that exist in our imagination are in the domain of cognitive economics, and will undoubtedly be a discussion topic at the free, virtual Cognitive Economics Society conference on 9-10 July 2020.)

About koenfucius

Wisdom or koenfusion? Maybe the difference is not that big.
This entry was posted in Behavioural economics, Economics, Emotions, Psychology and tagged . Bookmark the permalink.

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