Thinking Points Discussion: Status Quo Bias and Progressive Reform

I would like to begin by offering my appreciation for the insightful comments many of you offered in the survey to assess how this discussion series has gone so far. While some participants requested greater depth into the technical aspects of cognitive science, others felt intimidated by the level of discourse and want practical insights for laypersons. Eric Haas, a recent addition to Rockridge, is working with me to develop an educational agenda that is comprehensive enough to satisfy the diverse needs of the Rockridge Nation community. In the meantime, I will continue to introduce new concepts from the cognitive sciences that pertain to politics and reinforce the core concepts from Thinking Points.

Quick Comment About the Discussion:
I am an active participant in these discussions throughout the week that they are published. When the next installment is posted on Rockridge Nation, I devote more attention to it and don't get back to earlier articles very often. So if you want to participate during the time I am available to moderate discussions, please post your comments between now and next Monday, July 2nd.

New Series: Politics and the Psychology of Preference

There are many important findings from the cognitive sciences that the Rockridge Institute builds upon in our analysis of political discourse. This article is the first in a series about how preferences are constructed in people's minds. This is directly relevant to politics, where one of the most important activities is making choices among complex options in situations where there is uncertainty about the future.

This can be seen with an example.

Signing the Kyoto Protocol
Nations that agree to sign the Kyoto Protocol must reduce greenhouse gas emissions to at least 5% below 1990 levels by 2012. Assuming the United States agrees to meet this obligation, a number of options exist for striving to achieve the required level of reductions. Here are a few possibilities:

1. Improve efficiency of power plants and automobiles
2. Modify agricultural practices to reduce the amount of carbon dioxide that escapes tilled soils
   
3. Restore woodlands by encouraging land owners to plant more trees on grazing land
4. Capture carbon dioxide from power plants and pump it deep into the ocean
   
5. Reduce the size of our military (which requires large amounts of fuel for operations)

Each of these options (or some combination of them) requires policy makers to imagine future scenarios that cannot take all possibilities into account. Considerations need to be made regarding the security of food production, unexpected consequences of disrupting patterns in the oceans, and job availability if the economy is to be altered.

This would be difficult enough if people made decisions rationally (through conscious deliberation by weighing the pros and cons of each option). But it is even more complicated when we recognize that people do not make decisions in this way. Some limitations of rationality have already been discussed in Chapter 3 of Thinking Points. Now I want to expand on that discussion by sharing ideas about how people respond differently to potential losses than they do to potential gains.  This bias against losses reinforces the status quo and limits how broadly many progressives seek to make changes in society.

When Equal is Not Equal: The Extra Power of Loss

An important discovery made by Daniel Kahneman and Amos Tversky is that people have a greater aversion to losing something than they have an attraction to gaining something of equal magnitude. This phenomenon is called loss aversion and it is intimately related to framing.

Loss aversion is the phenomenon where a person gives greater significance to a potential loss than they give to a potential gain of equal magnitude.

It is very important to realize that not all options are created equal - even in the ideal case where quantities are the same!  This happens because value judgments are always made relative to something.  Consider the following two questions (created by Kahneman and Tversky):

Question 1
A shortage has developed for a popular model of automobile, and customers must now wait two months for delivery.  A dealer has been selling these cars at list price.  Now the dealer prices this model at $200 above list price.  Is this acceptable?

Question 2
A shortage has developed for a popular model of automobile, and customers must now wait two months for delivery.  A dealer has been selling these cars at a discount of $200 below list price.  Now the dealer prices this model only at list price.  Is this acceptable?

In both questions the benchmark is the list price.  In Question 1, the reader is asked to pay more than the list price.  This frames the situation as taking a loss relative to the benchmark.  Question 2 presents the change in price as starting below the list price.  The increase in price in this situation is framed as no longer receiving a discount. 

In the study that used these questions, 71% of participants felt Question 1 was unfair while only 42% felt Question 2 was unfair.  This disparity flies in the face of old-school rationalism, which would assert that both scenarios are numerically equivalent - the price increased by $200 in both - so they should be preferred equally.

Loss Aversion and the Politics of Fear

There have been books written about the use of fear to manipulate people.  Two noteworthy examples are Barry Glassner's Culture of Fear and Al Gore's The Assault on Reason.  These books describe the use of fear to overwhelm our capacity to reason effectively through constant immersion in intense anxiety.  While it is valid to acknowledge that intense emotional outbursts do compromise the capacity for human brains to reason effectively, it is also the case that emotions augment the processing of information by the brain to be able to reason effectively in most circumstances. 

Emotions do not oppose reason.  Instead, they augment the way our brains process information to alter how we reason.

Consider what happens when a person is walking along a trail in the woods and unexpectedly stumbles upon a rattlesnake.  The brain "recognizes" the snake as a threat and releases endorphins into the blood stream, resulting in a heightened awareness that can be described as a state of fear.  This alteration of the person's body alters the brain in a way that helps the person respond quickly to the threat.  Decisions are made much more rapidly when the body is alert, enabling the person to move out of harms way more effectively.  In this situation, it is quite "rational" to become more alert and move away from the snake.

In a less dramatic way, the processing of information in the brain is augmented in situations where losses are anticipated.  Thus when a choice is framed as a kind of loss, there is an emotional component of brain functioning that amplifies the significance of the decision. 

Preserving the Status Quo

There is a psychological tendency to reduce risk (or perceived risk) in all of us.  This phenomenon is called the status quo bias.  It is a feature of human behavior that progressives need to be aware of so that we are able to take it into consideration.  Here's how it works:

1. Uncertainty creates anxiety. 
   
2. This makes situations that are more familiar - assumed to be more predictable - feel more appealing.
3. This introduces a bias toward maintaining the status quo.

This phenomenon can be seen in the Kyoto Protocol, where the arbitrary number of 5% reductions below 1990 levels was selected.  Most people have no idea how large a 5% reduction in global warming pollution actually is, but it seems like a manageable number because it isn't very far from a value our society recently had.  This creates the impression that we won't have to change very much to achieve this goal.  Why didn't the drafters propose an 80% reduction (which may be necessary if we wait too long to address the climate crisis)?  They didn't select such a large number for many reasons, one of which is that it is not politically achievable when framed in this way.  There is too much emphasis on loss in this framing.

The situation is different when the loss is on the side of inaction.  Environmentalists understand this intuitively when they talk about the extinction of species, drying up of water supplies, flooding of coastal areas (and cities), etc.  This framing compels people to take action to avoid unacceptable losses. Yet, there is still a tendency to defend the status quo because people feel like there are competing losses, such as the loss of contemporary lifestyles versus the loss of these things.

Case in Point:  Recent Energy Bill

Last week the Senate approved a new energy bill that is a muddled progressive victory.  As I've argued, the debate was too narrow to achieve outright progressive goals.  The bill focused on fuel efficiency, alternative energy sources, and a few other minor alterations of the current structure of our energy grid.  It reflects minor tweaking of a way to produce and consume energy that is fundamentally out of balance with ecological processes. 

The idea of an energy bill that promotes livable communities was not considered during the debate.  This idea entails a strong progressive vision of healthy people living free from harm and secure indefinitely into the future.  Nothing in the energy bill expresses this vision because the status quo is assumed to be the standard.  Improvements, if they are to be made, are only considered if they are incremental changes relative to this benchmark.

Yet, the climate crisis, international security concerns, and the excessive waste of our energy system are leading us toward a major collapse.  We must "think outside the box" in order to see this.  It is not the case that we stand to lose our livelihoods by maintaining the current course.  The reality is that our livelihoods are at tremendous risk of being lost in the coming decades if we don't think broadly enough.

Status Quo and Progressive Reform

The progressive moral worldview is built around empathy and responsibility.  We must recognize when the status quo contradicts these core values.  We have a responsibility to the poor, future generations, and ourselves to alter what is currently a grossly unfair and destructive form of society.  The unconscious tendencies to avoid losses and reduce uncertainty hinder our ability to do this.  We can only turn this around by becoming aware of how our minds work and framing situations accurately and honestly in a manner that captures our authentic values.

A simple way to start is to practice framing losses where they belong and to recognize that people will take progressive action when they are shown what they will gain by doing so. 

Let's talk about this.  How can progressives benefit from knowing about loss aversion and the status quo bias?  What impact does this knowledge have on the way you think about issues you care about?

Further Reading

For those of you who have access to peer-reviewed journals, here is a short list of articles I read while preparing this segment.  If you do not have access to professional journals, you can get additional information at this wikipedia entry on the status quo bias.  It is not complete, but does go beyond what I've presented here.

Kahneman, D., Knetsch, J. L. & Thaler, R. H. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives, 5, 1, pp. 193-206
(This is the best overview article to read)

Tversky, A., & D. Kahneman (1974). Judgment Under Uncertainty: Heuristics and Biases. Science, 185, 4157, pp. 1124-1131

Kahneman, D., & A. Tversky (1979). Prospect Theory: An Analysis of Decision Under Risk. Econometrica. 47, 2, pp. 263-292

(Next week I will introduce another aspect of political preferences having to do with the role of "gut feelings" in biasing choices.)