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Decisive Advantage 

click to enlarge Font of wisdom: Morewedge, in his new home, with furnishings - HEATHER MULL
  • Heather Mull
  • Font of wisdom: Morewedge, in his new home, with furnishings

The house Carey Morewedge didn't buy is in Edgewood. It has stained-glass windows, polished hardwood floors, an original fireplace. A graceful front porch is screened from the street by trees; out back is a secluded garden. In Morewedge's photos, it looks like the kind of home that would cost $300,000 in any market other than Pittsburgh.

But Morewedge and his girlfriend didn't even make an offer. Instead, they bought a house in Friendship, a stone's throw from a Penn Avenue funeral home. It's a three-story home with its own charm, but it's also been vacant since 1992. The porch is currently choked with torn-out plumbing and old wiring, while inside, plaster dust hangs in the air as Morewedge's contractor guts the interior. Out back is a standalone garage that is barely standing -- a brick husk that looks like it was struck by a Predator drone. 

"We liked the house in Edgewood a lot," Morewedge explains. "But it was near a highway. People think they'll adapt to having a highway nearby, but your cortisol levels never adjust. It's a constant stress." 

As an assistant professor of social and decision sciences at Carnegie Mellon University, Morewedge spends a lot of time studying why we make bad choices. One reason is that when we decide where to live, we don't know what factors will prove most important. Like our daily commute. 

"People can adjust to things like the size of their home, but they never adapt to commuting," says Morewedge. He bikes to campus and says, "My girlfriend and I biked the route from Edgewood to CMU, and that hill on Forbes Avenue [leading up from Frick Park] dissuaded us." The current house needs work, he allows, but, "It made more sense to find a place we like and make the effort to renovate it." 

Morewedge, 32, is a young, up-and-coming professor in a young, up-and-coming field. He's garnered national media attention from such general-interest writers as the New Yorker's Malcolm Gladwell and John Tierney of The New York Times. And he's earning a reputation for his innovative way of testing behavior -- an approach that's as likely to find him experimenting on Carson Street drunks as in a lab.

But he also knows his research has limits. Among them is the fact that studying decisions doesn't always improve your skill at making them.

"I study decision-making and rationalizing, but I end up rationalizing a lot," Morewedge says. "I'm probably overstating the negativity of the commute from Edgewood -- just to justify not buying that house." 

 

Morewedge looks a bit like the guy who plays Jim in NBC's The Office, right down to his expression of wry bemusement. But his apparent reserve can be misleading: One of his CMU colleagues, George Loewenstein, credits him with "lifting the social life of the department from zero to a very high level." A regular academic confab for Morewedge, for example, involves shooting pool at Gooski's, in Polish Hill.

While in grad school at Harvard, Morewedge often moonlighted as a DJ, prompting colleagues to speculate, half jokingly, that a DJ may be a kind of social scientist: Both professions require sizing up group dynamics. Morewedge demurs: "I think the outcome of my career suggests I'm better at dissecting behavior than motivating it," he says.

A native of Binghamton, N.Y., whose parents were academics -- his father taught philosophy, his mother medieval literature -- Morewedge planned to take up the family business. In college he took a psychology course, and was captivated by Solomon Asch's experiments on conformity.

In one experiment, Asch placed a test subject in a classroom with other "subjects," who were really actors. Subjects were told they were taking part in a vision test, and were asked to identify which of three lines was the longest. The actors began giving blatantly incorrect answers -- and test subjects would frequently begin to agree. 

In film of the experiments, "You could see on their faces this look of disbelief," Morewedge says. "But gradually they would agree with the consensus." 

Intrigued, Morewedge took up social psychology, which studies how social pressure shapes behavior. And he began specializing in decision-making -- an emerging field which borrows from psychology, economics and other disciplines to study why we make the choices we do. 

Morewedge's research focuses on how we assess the desirability of an experience -- an assessment we frequently get wrong -- and how we attribute causes to the things that happen to us. Among the findings he's either authored or assisted with so far:

 

-- Not only is the future unknowable; so are our reactions to it. When we imagine a future event, we overestimate the satisfaction or disappointment we expect to feel when it happens. In fact, severe setbacks can be easier to cope with than mild irritations: Defense mechanisms help us cope with the former, whereas the latter irk us continually.

-- People who are prompted to think about smaller amounts of money -- say, the cash currently in their wallet -- before shopping will spend less than people who are asked to think about large sums of money, like the sums in their bank account. 

-- We often ascribe more importance to dreams than we do to conscious thought. But that's at least partly because, without even knowing it, we interpret our dreams in ways that coincide with our own self-interest. 

 

Such findings are making Morewedge's colleagues take notice. "Carey is one of the most creative people I know," says Dan Ariely, whose 2008 book Predictably Irrational: The Hidden Forces That Shape Our Decisions helped introduce the field to the general public.

"He's got creative flair, an eye for what's interesting and important," agrees Loewenstein. "He's doing some of the edgiest research in the university." 

And CMU is widely recognized as "one of the top places in the world for people interested in decision-making," says one of Morewedge's collaborators, Michael I. Norton of Harvard Business School. Partly that's due to the influence of the late Herb Simon, who all but created the field at CMU. And partly it's due to the program's interdisciplinarity: Faculty expertise ranges from psychology to economics, and national security to neuroscience. 

What's more, the field is currently in vogue. Some of its findings have been summarized in Malcolm Gladwell's bestselling 2005 book Blink: The Power of Thinking Without Thinking. Behavioral economics -- which makes use of the kind of research Morewedge does -- is also modish. Several of Barack Obama's advisers are adherents. And as a result, instead of signing up for a 401(k) retirement program at your next job, you might be enrolled automatically and given a chance to opt out. Behavioral economists say we are strangely passive about our retirement plans, and are more likely to participate if we don't have to enroll ourselves.

"People are going to be affected by the work in this field," says Loewenstein, "whether they know about it or not."

Which explains why Morewedge and his associates were out on East Carson Street last winter, trying to get drunken South Side revelers to step inside a truck.

 

click to enlarge Morewedge beside CMU's "Research to Go" truck - HEATHER MULL
  • Heather Mull
  • Morewedge beside CMU's "Research to Go" truck

Carson Street might seem an unlikely place to study thought processes, at least on a weekend. But it's perfect if you want to analyze reactions untainted by strategic thinking, which made it a great lab for testing the mysteries of the "ultimatum game." 

The game is a common experiment. In it, a researcher offers you a sum of money. You, in turn, choose how much of the cash to offer another test subject. If your offer is too low, your partner can reject it, and neither of you gets paid.

Logically, your partner should take whatever you offer, since the alternative is to get nothing. But as Morewedge notes, "When people are offered less money than they feel they deserve, there's a conflict between taking the reward and suppressing their anger." Previous testing suggests that your partner will likely reject anything less than 30 cents on the dollar. But there are competing theories about why that is. One is that she's teaching you to be more generous if you play the game again. A second theory is that your partner is punishing your selfishness, even if it costs her as well.

Morewedge wanted to study how alcohol would affect such calculations. He figured a drunk participant would make more generous initial offers -- as when a friendly drunk buys a round for everyone at the bar. But he also suspected that booze "would make people more sensitive to perceived unfairness," like the drunk who gets belligerent when you bump into him. 

Sadly, however, scientific ethics generally prohibit researchers from getting large numbers of people severely drunk. "We needed a large sample size," says Morewedge, "and so we did the study on Carson Street," where people had already done the drinking themselves.

Morewedge made use of CMU's "Research to Go" truck, a mobile lab the school uses to find off-campus test subjects. He parked across from Diesel nightclub, as research assistants encouraged passers-by to go inside and play the game. 

"I made lots of friends," says Tamar Krishnamurti, one of the study's coauthors. "It was very cold outside, and the truck was warm." Test subjects were given breathalyzer tests, and if the results were high, they were urged not to drive home. As with the nearby bars, "Someone was working the door to make sure no one got out of hand," Krishnamurti says. "But people were well behaved." 

Colleagues say the Carson Street study is typical of Morewedge's offbeat approach. Nicholas Epley, a University of Chicago professor who has worked with Morewedge on other findings, attributes that partly to Morewedge's stint at Harvard. "There was a belief that it was unethical to run experiments on undergraduates," Epley recalls. So researchers headed off-campus, finding subjects in places like historic South Station.

Going to the South Side, meanwhile, went without a hitch. Almost: "Somebody did throw up inside the truck," Morewedge says. And the study -- which was confirmed by a lab trial using lower alcohol levels -- at least partially confirmed Morewedge's expectations. Participants were more likely to scotch the deal if they got less than half the money ... but booze didn't make initial offers much more generous. 

And before the study was even published in an academic journal, it was picked up by The New York Times Magazine's annual "year of ideas" issue, a round-up of fresh concepts ranging from the revolutionary to the merely weird. "The finding suggests ... that the principal impulse driving subjects was a wish for revenge," the magazine concluded.

Morewedge admits the coverage made him uneasy. "I never like to talk about research before it is published, because I would like my peers to deem it to be valid [first]," he says. (The Times got word of the study, he says, from a colleague he'd discussed it with.) But the Times gave him a chance to put strong data before a large audience, he says. "We know a lot about how alcohol affects perception, but not much about how it affects our decisions." 

Krishnamurti's work, for example, often focuses on sexual behavior. And whether the subject is unprotected sex or ultimatums, she says, drunks are more interested in their impulse at the moment. "Drunk people are able to make the same assessments about risk as sober people," she says. "They just don't care as much." 

That may not sound like much of a distinction, but Krishnamurti -- who recently finished her doctoral dissertation at CMU -- says it has important implications. "Throwing information about STDs at drunk people isn't going to work. You need to communicate risks in a more visceral way, one that has emotional appeal."

Others drew different conclusions from the study. City Councilor Bruce Kraus, who represents the South Side, read the Times story and cites it as proof of Carson's Street wretched excess. Kraus doesn't fault the study's ethics, but wonders whether "we're at the point where researchers can go to Carson Street and -- just by picking people at random -- find people drunker than they can create under laboratory conditions. I guess we are."

It could be worse. Ariely recalls that "Carey and I once tried to collect data at the Burning Man Festival" -- a yearly bacchanal held in the Nevada desert. "But people there were either too high, or not high enough." 

Besides, Ariely says, "Social sciences should be involved in every aspect of our lives -- and drinking is part of life." Conducting field research helps "connect us to people in their real lives." Lab work helps limit extraneous factors, but Ariely says it can distort results in other ways: "People behave differently in a lab than out on the street." 

And they behave differently on the street than they do on campus. Using the "Research to Go" truck "is a great way to collect data from a community who are less homogeneous than our students," Morewedge says.

 

Students wrestle with decisions too, of course. Just before Morewedge began a lecture last month, some were still weighing their choice of college. "We have a lot of Nobel laureates here," a first-year student told a friend outside the lecture hall. "I don't know about the quality of education, but the value of a diploma is pretty high." 

It might be best, however, not to quantify that. Once class begins, Morewedge makes a case to his 80 students that "more thought isn't always better," he says. 

The more we analyze our decisions, it seems, the less happy we may be with the outcome. Numerous studies testify to this, among them one suggesting that, as Morewedge puts it, "The better you think New Year's Eve is going to be, the more disappointing it is." 

But Maria Fei, who is graduating with a dual major in decision science and psychology, is pretty pleased with her choice of major. 

"When I first went into decision-making, no one knew what it was," says Fei, who helped recruit Carson Street participants for the ultimatum game. "People would make fun of it. It's much more popular now." 

One reason is simple: "It's fun," Fei says, and it deals in issues everyone can relate to. Krishnamurti, for example, has delved into such questions as whether adultery is more satisfying than sex inside of marriage. (Answer: Based on surveys, "The sex itself is not particularly better," says Krishnamurti. The truly pleasurable part is the anticipation.)

Or take Nicholas Epley's research into the likelihood that e-mails will be misinterpreted. E-mail writers, he has found, egocentrically assume that readers will read the e-mail in the same spirit it was written. But "If you're trying to figure out whether an e-mail's being sarcastic or serious," Epley says, "people are only slightly more accurate than a flip of the coin." 

And researchers don't just investigate pop culture. Sometimes they become part of it. Morewedge's post-doctorate adviser, Daniel Gilbert, appeared on The Colbert Report after writing a book on happiness. Morewedge and Michael I. Norton's work on dream interpretation has been widely reported, and Norton has a working paper titled "'I read Playboy for the articles': Justifying and rationalizing questionable preferences." 

But Fei says her education hasn't prevented her from making bad decisions. When shopping, "I'll still fall prey to all the pitfalls I know about, even though I know about them. Everyone in school jokes about that." Even so, "I've learned that it can be better to make a decision that feels right rather than going into all the detail. Because the more alternatives you have, the more confused you can become."

In fact, much of the knowledge gleaned from decision science concerns how little we really know. Morewedge's philosopher dad might have taught the Greek dictum to "know thyself," but it's not that easy. "We probably overestimate the extent to which our behavior is determined by our intentions, and underestimate the extent to which we're prompted by the circumstance we're in," Morewedge says.

We also overestimate our ability to understand those circumstances -- a finding that has shaken up the field of economics. Economists typically assume that consumers act out of rational self-interest. But it's hard to square that with research like Morewedge's study showing that people spend more when asked about the size of their bank account, rather than the cash in their wallet.

"The insight of that study was that when people go shopping, it doesn't occur to them how much money they have," says Epley, who co-authored it. "Economic theories assume a tremendous amount of cognitive power that we know people don't have."  

Decision-science experts sometimes are able to make use of their own findings, though. The most extreme example may be Gilbert, whom Morewedge assisted on a study suggesting people are happier with their decisions when they don't deliberate too much beforehand. That finding prompted Gilbert to propose to his longtime girlfriend: "I always thought love causes marriage," Gilbert told the Washington Post in 2008, "but my data said marriage causes love." 

 

On the other hand, "Dan had been dating for 13 years," observes Morewedge -- who, it bears noting, has been dating his significant other for just three.

Which brings us back to how the couple chose their house. Because if marriage causes love, does it matter who you marry? If the best way to make a decision is to "go with your gut," does that make George W. Bush a genius for invading Iraq? 

Such questions oversimplify what decision-making is about, which is one reason Morewedge has to be careful of articles like this one. "It's a field where there are so many correlations to real life that people are naturally interested," Morewedge says. But even a thoughtful writer like Malcolm Gladwell can make "overgeneralizations," advancing bold claims without the caveats careful researchers use.

And it's not as if Morewedge just bought the first house he saw: He looked at 30 before making an offer. And while he was looking for "my idea of what a Pittsburgh house was -- being made of brick, having some character" -- he weighed plenty of quantitative factors too. 

Like many buyers, for example, he decided early on how much he could afford to spend on a mortgage. Unlike many buyers, though, he refused to look at homes that cost above that range: "I thought that would lead me to be dissatisfied with whatever I ended up choosing," he says. And once he defined key parameters like cost and distance from work, he chose among homes partly "based on affect," which is how psychologists say, "I went with a feeling."

Because uncertainty causes discomfort, concedes Morewedge, "In the short run, it's more pleasurable to not buy a house." But over time, "you're more likely to regret not buying a house at all." 

The idea that your brain will find ways to make you feel better about outcomes is as old as Aesop's fable concerning sour grapes. (The notion that it's better to regret what you've done than what you haven't done, meanwhile, dates back to the Butthole Surfers.) Outside the laboratory, decision-making is art as well as science. It's partly about using rationality to rein in emotions, but it reminds us that when there are many variables to consider, emotions help us choose which matter most.

So far, at least, Morewedge has few regrets about his house. He's got plans for an open-air eating area where the garage was, there are some nice built-ins around the dining room and there's plenty of light everywhere. And there have been some pleasant surprises, too. At the closing, Morewedge says, the late homeowner's daughter handed him "all these spreadsheets that go back to when the house became vacant in 1992," detailing nearly 20 years of maintenance and utility bills. 

"I had this incredible data set," Morewedge says. "It was like crack for me." 

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