Insights: News

Gotta Have Faith

The high price of mistrust

The phrase "You can bank on it" has become a cruel punch line in the wake of the global financial crisis. Data show that Americans' trust in financial institutions has plummeted in the past two years, but research out of Italy reveals the danger of overcorrecting our confidence.

Using survey data from 26 European countries, researchers compared household income to respondents' level of trust in others (measured from zero to ten) and found a sweet spot around eight. The most trusting, at ten, earned 7.3 percent less than eights did. They're apparently easy targets for bad bargains. But the most skeptical, at zero, earned 14.5 percent less—a disadvantage equivalent to not going to college. By looking askance at the world, they miss opportune investments.

Mistrust also has larger social costs. "Consider a penniless inventor and a wealthy potential investor," lead investigator Jeffrey Butler says. If they don't come together, they both lose out, and so does anyone who might use the invention or buy the resulting company's stock. "Trust increases the size of the pie." —Matthew Hutson

As the World Spins

Selling carbon surcharges

Participants in the current debates about carbon offsets might want to heed new research highlighting the importance of wording one's case correctly the first time.

Columbia University psychologists found that Republicans were more likely to back plans to fund clean-energy sources by charging for climate-warming carbon emissions when they were described as "carbon offset" programs than as "carbon tax" projects. (The terminology made no difference to self-described Democrats and Independents.)

And if one hears both terms, the order in which one hears them matters. When Republicans were asked to consider the downsides of a carbon tax and then the benefits, 8 percent supported it, but when they considered the benefits first, 21 percent supported it. Hearing a term that plays up the positive may lead us to weigh pluses before minuses.

More generally, the research explains how framing works, says study coauthor David Hardisty. "It affects the order in which you consider things, which affects the reasoning you come up with, which affects your preferences." —Jordan Lite

Gray Hair, Silver Lining

The workings of wisdom

As the economy has faltered, companies have been sloughing off employees. Often, older employees are being shown the door. But a new study identifies distinct cognitive advantages of the more experienced over their younger colleagues.

As we age, our brains lose some of their ability to filter out irrelevant stimuli. But research conducted at the University of Toronto reveals that the increased susceptibility to distraction comes with a silver lining—a boost in certain kinds of associative memory. In the study, the psychologists asked young adults and older adults to review a series of images paired with unrelated words and pay attention only to the images, but researchers later surprised the participants by asking them to recall the paired words. The older adults performed 30 percent better than their younger counterparts.

In the real world, "there could be cases where what didn't seem important to you may be important later on," says Karen Campbell, the study's lead author. This study, Campbell adds, may explain why older sometimes means wiser. —Emily Anthes

The Feel-Good Altruist

Helping Haiti or yourself?

January's earthquake in Haiti sparked enormous generosity worldwide. Neuroscience research suggests that this outpouring of altruism occurred—at least in part—because helping others feels good. For example, "reward centers" in the brain are activated both by treating ourselves (with chocolate, for example) and by giving to others.

But if selfless and selfish activities are both pleasurable, is donating to charity any different to the brain than, say, getting a massage? A new study from Caltech provides an answer. When individuals give to charity, not only are reward areas activated, but so are areas involved in paying attention to the thoughts and emotions of other people. Their interaction suggests that the pleasure we feel when giving depends on thinking how others feel.

This insight could prove useful to charities. Instead of focusing people's attention on the abstract toll of disasters (like the number of people killed), charities should get us to think about the specific thoughts and feelings of affected individuals. As Stalin said, the death of a million is just a statistic. —Jamil Zaki

Full-Contact Sport

Teams should get touchy.

With the NBA playoffs under way, you might consider a predictive metric when making your bets: high fives. Touch enhances cooperation and reduces anxiety, and new research suggests that it might even improve a team's performance on the court.

Michael Kraus and collaborators at UC Berkeley counted celebratory contact such as fist bumps and head slaps among all 30 NBA teams early in the 2008-2009 season. They also looked at cooperative behavior such as passing and setting blocks. Finally, they analyzed individual and team performance over the season.

Teams that touched more cooperated more, which made them play better throughout the season. (The researchers tried to rule out general team cohesion as the cause of both contact and cooperation by controlling for roster stability.) Touch appeared to solidify relationships and make players work better together.

Kraus recommends making work and family life full-contact sports, too. But use touch appropriately, he warns: "Chest bumps are not going to carry over to your office." —Matthew Hutson

Sleep: Omission by Overthinking

Staying relaxed beats sleep deprivation.

Sleep deprivation puts some people on autopilot, but that may not be such a bad thing. Research finds that thinking hard when tired can sometimes get in the way of good judgment. Subjects learned to sort ambiguous pictures into two categories, then missed a night's sleep, and repeated the task the next day. Those who relied on intuition both days didn't see a performance drop-off, but people who switched to a deliberate, rule-based strategy fared worse after the all-nighter. Drowsy on the job? Relax a little. (Just don't close your eyes.) —Matthew Hutson