Maybe We’re Not All Completely Greedy and Evil.

Recently, at a local coffee shop, my wife – who had been keeping count – told me that I‘d consumed six cups of coffee over two hours for one low price of $2.89. She observed that I would never have done that if the shop charged for refills. My inner economist called out: “moral hazard!”

You might not have heard of moral hazard, but it strongly influences our thinking. It’s the assumption that we act irresponsibly when there are no negative consequences – in other words, if we know somebody else will absorb the cost, we act recklessly, and even antisocially. It’s a pervasive mindset in our culture, and is at the heart of a lot of our disagreements.

• When elected officials demand that public assistance programs be time-limited and linked to work, a moral hazard mindset is probably driving that rhetoric. They are assuming that, without restrictions, participants in these programs will exploit them indefinitely.

• When parents or child-rearing experts espouse the necessity of setting ‘firm boundaries,’ or clear consequences for children, moral hazard thinking is probably lurking beneath the surface. The idea is that, without boundaries and consequences, kids will just take advantage of their parents.

This idea frequently emerges in the qualitative research I conduct. I once moderated several studies on health insurance, conducting over 150 interviews and groups with healthcare providers, administrators and consumers. I found a widespread perception that, if healthcare services and products are too easily accessible, people will use them wastefully.

I also encounter this idea frequently in social situations. Listen to conversations these days about things like bank bailouts and the social safety net. The opinions people express are strongly informed by a moral hazard mindset.

Where does this idea come from? And, more importantly, is it true?

Let’s start with its origin. The concept of moral hazard comes to us from the field of economics, dating back to the 17^th century. Since then, it has been widely studied as a source of economic inefficiency.

And, is it true? The accurate answer is ‘it’s complicated.’ It’s clear that, in the context of health insurance, the influence of moral hazard is – according to healthcare economist Uwe Reinhardt – ‘overblown.’ He points out that people dislike going to doctors and taking medication, making it unlikely that being insured will lead them to consume healthcare excessively. There is also quite a bit of data that backs him up.

And yet, there’s no denying that moral hazard is a real thing.

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Why do I bring all this up? Because moral hazard is a highly influential idea. I encounter it – usually unspoken – all the time when conducting market research, it frequently arises in conversation with friends and family, and it plays an enormous role in formulating government policies.

It’s undeniable that moral hazard exists. Remember the six cups of coffee? Clearly, coffee isn’t healthcare. Jeff, the café owner, told me that he was fine with this – the economics of a cup of coffee are so favorable that he still makes good money on freeloaders like me. If he didn’t, he would limit refills. He also finds that his loyal customers like the policy, and believes that it creates an atmosphere of trust and shared purpose among his customers and employees.

It’s important to understand that moral hazard is a mindset – a set of assumptions that shape our interpretation of the world around us. Specifically, it’s a moral mindset – it assumes that people are inherently wicked and greedy, and that they will engage in antisocial behavior if they are insulated from the consequences of that behavior.

Those for whom this mindset plays an important role assume that people will invariably act immorally given the opportunity, and that we gain little from having faith in others. Others tend to be more trusting of their fellow humans. Furthermore, as evolutionary biologists have observed, selflessness and altruism clearly exist across many species.  So, if you find yourself disagreeing with a friend, family member or politician, consider the possibility that different assumptions about moral hazard are the source of that disagreement, and take this as an opportunity to engage in some thoughtful conversation.

Over the past three years we’ve been interacting with others online a lot more, and in person a lot less. On one hand, I’m grateful the online tools exist. Not only would all of my fellow qualitative researchers and I have been out of business without them, but they enabled me to spend time with friends and family I might not otherwise have been able to see.

On the other hand, the level of nuance and engagement we get from online interactions pales next to what we get in-person. So, it’s been great getting back to seeing people face-to-face. I’ve also been very happy to be doing quite a bit more face-to-face qualitative research over the past ten months than in the previous couple of years.

In-person contact provides those all-important non-verbal cues: body language, gestures, facial expressions, and tone of voice. Sometimes you can pick those up on a video call, but not nearly as much as when you’re actually there. Non-verbals are clues to people’s emotional states and attitudes. They can tell you when someone is kidding or being sarcastic, honest or deceptive, anxious or offended. They help build rapport during conversation. This is why I’ve been encouraging my clients to get back to face-to-face research when possible.

I’ve also been making use recently of tools that detect non-verbal cues when conducting online research, specifically online eye tracking and facial coding. Both work through the research respondent’s own webcam, so no additional hardware is required. How can these tools help us?

Eye tracking is useful when conducting research involving some sort of stimulus, such as an advertisement, a package mockup, or a webpage. It can show which elements in the stimulus are drawing attention, and how long people are focusing on those elements.

Facial coding captures involuntary micro-expressions that are not discernable to the naked eye, and that reveal the respondent’s emotional state. Sometimes people aren’t honest about their emotions at a given time, or may not even be aware of them. But micro-expressions give them away.

While it would be overstating to say these tools replicate the advantages of in-person interaction, they do serve to increase the insights we can draw from online experiences – giving us more bang for our research buck.

OK – let’s get this out of the way; despite my deliberately provocative title, willpower isn’t a myth. But there’s a lot of BS out there about willpower.

It’s that time of year – when those earnest new year’s resolutions made in January now lie in shambles. And that’s when willpower raises its ugly head. If you’ve failed to keep your resolutions, it’s likely you’re berating yourself for lacking willpower. Don’t. Behavior change is hard. Much of the self-flagellation in which people engage regarding willpower comes from a series of misunderstandings about what willpower is and how it works.

Let’s start with a definition. I think of willpower as the ability to delay gratification to serve long term goals. Examples: forgoing that donut so you’ll live longer, or bearing down and preparing your taxes in January so you’ll get your refund sooner.

Willpower is a good thing – it helps you get unpleasant-but-necessary stuff done. But there are key things to know about willpower, and a couple of misperceptions about it that need to be set straight. When conducting qualitative research on such topics as weight loss and smoking cessation, I see misunderstandings about willpower come up regularly.

Here are some things you need to know:

It’s a finite resource. I can’t stress this enough: willpower will only take you so far, as it eventually runs out. Psychologists and addiction counselors refer to ‘willpower fatigue.’ It’s also called ‘ego depletion,’ and it’s a real thing, having been documented in numerous studies. This is why the failure rate for most weight loss programs is so high: they depend on an indefinite, limitless supply of willpower to achieve lasting success.

Not only is willpower finite over time, it is also finite in the moment; if you’re exercising willpower in one aspect of life, there will be less for other things. If you’re gritting your teeth to get your taxes done, you might find it doubly difficult to resist that donut. This is one reason people trying to quit smoking often gain weight – they’re expending so much mental energy resisting nicotine cravings, they’re less able to police their eating. Willpower can also be compromised by stress and fatigue – think about how hard it is to eat right when traveling on business.

Willpower is a skill.  It’s something that can be learned. Like a muscle, it can be strengthened through training and repetition, and it can atrophy from disuse. Psychologist have shown that by consistently exercising willpower in small ways, people can become more adept at resisting bigger temptations.

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And here are two major misperceptions about willpower:

Willpower is a matter of character. Successful people often attribute their achievements to willpower, self-discipline, and perseverance, and believe that those who are less successful lack these qualities. Similarly, we tend to assume that others who are successful must be highly disciplined individuals. As a qualitative researcher, I hear this sort of thinking all the time, and believe it is simplistic and wrong. If you think success comes from willpower and that willpower is a virtue, then those who have experienced failure in their lives must lack this virtue and be, by definition, weak and immoral individuals. This sort of thinking is unfairly judgmental.

Willpower is all you need.  The idea that willpower alone can drive behavior changes – particularly permanent ones – is something I hear frequently. However, without motivation and environmental change, willpower by itself is insufficient. I’ve conducted many focus groups and interviews on the topic of weight loss. I’ve noticed that not all people trying to shed weight really want to – they’re doing it because a healthcare provider or family member is pushing them to do it. So, they’re not motivated to make necessary behavioral changes.

I’ve also seen that people who successfully lost weight were able to because they changed their environment – they removed fattening foods from their homes and workplaces, stopped going where fattening foods would be present, and were able to reduce the cravings that cause them to overconsume fattening foods. Without these environmental changes, they wouldn’t have been able to instill the permanent behavior changes that facilitated the weight loss.

I’ll wrap up with a few tips:

Do what you can to make willpower unnecessary (or, at least, less so). Behavior changes often are tripped up by cravings and temptations. I’ve done a number of qualitative research studies that involved speaking to addiction counselors. One thing they repeatedly emphasized is that cravings can eventually subside through abstinence. While this takes time, during which willpower is essential, eventually the reduction or elimination of the craving makes willpower less necessary.

Focus on your environment. If willpower is about resisting temptation, removing sources of temptation from your environment will make willpower less necessary.

Focus on motivation. If you’re attempting to make a behavior change, have an honest conversation with yourself about what’s motivating this change. Is it in your economic interest to make this change? Is there some psychological or self-esteem benefit to be gained? Make sure you really understand, in as much detail as possible, what, if anything, is driving this change.

Rather than trying to eliminate a behavior, start by replacing it. This is why nicotine gum is helpful to those trying to quit smoking – it replaces the act of putting a cigarette in their mouths with a piece of gum. This still requires some willpower, but less than doing nothing would require.

We all know it: behavior change is challenging. But, if you want it make it a little easier, do what you can to reduce the importance of willpower.

At a few social functions over the holidays, as well as in the media, I noticed the term ‘virtue signaling’ being used in a negative way. The notion that virtue signaling is somehow a bad thing seems to be increasingly common.

Let’s take a minute to define the term: virtue signaling is how you demonstrate you are a good person through opinions you express or personal behaviors you model. When somebody accuses you of it, the implication is that you’re ‘putting on a show’ or are ‘full of BS.’ Some examples of virtue signaling might include talking about your fat-free diet, wearing an “I support public radio” t-shirt, or bragging about your 80-hour work week.

People tend to find virtue signaling annoying, which creates friction in conversations and relationships. While it’s easy to disregard virtue signaling since it can be so off-putting, I recommend paying close attention to it for these reasons:

Everybody does it. If you think you don’t, think again. Homo Sapiens is the moral animal. Our sense of right and wrong is always front and center in our thoughts— it’s what sets us apart from other species. So, signaling morality to our fellow humans is as natural as breathing. We all do it, and we do it all the time. This presents a paradox: we do it ourselves, but we find it obnoxious in others. If you had run into me on election day back in November, you would have seen me wearing an ‘I voted’ sticker and an ‘I gave blood today’ sticker, and feeling very smug. You probably would have crossed the street to avoid talking to me.

It can tell you a lot about people and their values. Virtue signaling is a form of ‘morality by proxy.’ A proxy is something that represents the value of something else, so virtue signaling is a behavior that represents a moral value. Because we’re so attuned to morality as a species, we use personal attributes as proxies for moral character in others: physical beauty and wealth to name two. And, when we want others to notice our virtues, we signal them. You might do this by displaying your muscles at the gym or by making a show of your electric car.

So, when people virtue signal, they are telling you something about themselves that they believe is important – giving you a window into their self-image. This presents a great opportunity to learn more about them.

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I’ve certainly noticed when conducting qualitative research that participants sometimes try to put each other on the defensive or quash disagreement either by virtue signaling or by questioning the sincerity of others who are doing it. Here’s an example:

While moderating focus groups on educational software, talking to parents who homeschool, one mother of a 7-year-old said: “Obviously, I would never have my daughter use that. Everything she learns she gets from me.” Several other participants vigorously agreed. A dad who had a 14-year-old pushed back: “my daughter is doing stuff right now – particularly in math – that’s over my head. The software I bought is teaching her material I can’t.” The mom replied, “I just could never do that,” the dad accused her of “self-righteous BS,” and it went downhill from there.

A little later, after things had calmed down, I asked the anti-software mom, “what do you think that says about you as a parent?” She replied, “that I’m not willing to take shortcuts or make anything less than a full effort.” Another like-minded parent chimed in, “I think it says I’m an old-school homeschooler.” And, when I asked what ‘old-school’ meant to him, he said it meant he lives by “traditional values.” This led to a good conversation about ‘traditional values’ – what they are and what they have to do with homeschooling.

Pay attention to virtue signaling, but be careful about taking it at face value. While it can tell you a lot about how people see themselves, remember that they might be blowing smoke. The fact that you gave $50 to public radio last year – and are displaying the tote bag to prove it –  doesn’t by itself make you generous. The fact that you drive a Prius doesn’t make you a committed environmentalist.

Virtue signaling is neither a good thing nor a bad thing, it’s just a human thing. We can no more stop doing it than we can stop breathing. However, we can train ourselves to become more aware of it in ourselves and others. Try paying attention to the virtues you signal and how you go about that. Think about what kind of impression are you creating and, how it affects relationships and interactions with your fellow humans. As for other people’s virtue signaling, treat it as an opportunity to ask questions and get to know them better.

A while ago, I was conducting focus groups on new frozen food products. Of 12 concepts, participants consistently called two interesting, but said they probably wouldn’t try them, as their freezers were overfull.

My instinct was to be skeptical of the ‘no-room-in-the-freezer’ justification. Between groups I thought about why, and recalled that the ‘no room’ rationale was often code for ‘this product offers no benefit’ – something I learned early in my career from friend and researcher-extraordinaire, Phil Glowatz.

Meanwhile, the clients in attendance were encouraged by the feedback on those ideas, and planned to put resources toward further development. I continued to probe reactions to these concepts, pushing participants to explain the basis for their professed interest.

Ultimately, we learned this: for the younger, apartment-dwelling participants, my intuition was wrong. They were genuinely interested, but were strapped for space in their tiny apartment freezers. However, I was right about the older suburbanites, who couldn’t articulate a coherent case for their interest. Eventually, some admitted that they were just trying to be nice. As a result, the client turned development efforts toward a smaller package and a formulation that didn’t need to be frozen.

The point of all this: intuition is valuable, but you must be careful about trusting it. Knowing when and how much to rely on intuition is an important skill, no matter what you do.

There are two kinds of intuition:

1. Rapid, subconscious analysis of information informed by prior experience.

2. Impulsive judgements shaped by your desires and biases. So sometimes intuition is your brain working incredibly fast, and sometimes it’s your brain just being lazy.

As a result, sometimes intuition can get you to a well-founded POV with blinding speed, and sometimes it can lead you astray.

Here are two principles I follow regarding intuition:

Be suspicious of your first, instinctive reactions. Pause, examine those reactions, and figure out where they came from – are they coming from bias or from experience? In other words, before questioning the information you’ve just encountered, first interrogate your own response. This is particularly helpful when somebody expresses a POV with which you intuitively disagree. By examining your initial reaction, you might be able to avoid a pointless, emotional argument and instead have a friendly, respectful conversation.

Realize that intuition is where you start, not where you finish. Intuition gives you an initial impression to follow up upon, not a final answer. Treat it as a hypothesis to be disproven.

Like any powerful tool, intuition must be used with care. It’s like a table saw – when treated with care, it can save time and deliver a high-quality product. But, if you’re not careful, it can cut your thumb off. So, respect your intuition, but don’t trust it. At least, not too much.