Win–win Denial: The Psychological Underpinnings of Zero-sum Thinking

Johnson, Samuel G. B., Jiewen Zhang, and Frank Keil. 2020. “Win–win Denial: The Psychological Underpinnings of Zero-sum Thinking.” PsyArXiv. April 30. psyarxiv.com/efs5y

Abstract: A core proposition in economics is that voluntary exchanges benefit both parties. We show that people often deny the mutually beneficial nature of exchange, instead espousing the belief that one or both parties fail to benefit from the exchange. Across 4 studies (and 7 further studies in the Supplementary Materials), participants read about simple exchanges of goods and services, judging whether each party to the transaction was better off or worse off afterwards. These studies revealed that win–win denial is pervasive, with buyers consistently seen as less likely to benefit from transactions than sellers. Several potential psychological mechanisms underlying win–win denial are considered, with the most important influences being mercantilist theories of value (confusing wealth for money) and naïve realism (failing to observe that people do not arbitrarily enter exchanges). We argue that these results have widespread implications for politics and society.

Check also The politics of zero-sum thinking: The relationship between political ideology and the belief that life is a zero-sum game. Shai Davidai, Martino Ongis. Science Advances Dec 18 2019, Vol. 5, no. 12, eaay3761. https://www.bipartisanalliance.com/2019/12/liberals-exhibit-zero-sum-thinking-when.html

The Fallacy of an Airtight Alibi, Understanding Human Memory: Strong evidence that participants confuse days across weeks; in addition, people often confused weeks in general and also hours across days

Laliberte, Elizabeth, Hyungwook Yim, Benjamin Stone, and Simon Dennis. 2020. “The Fallacy of an Airtight Alibi: Understanding Human Memory for Where Using Experience Sampling.” PsyArXiv. April 30. psyarxiv.com/6rce5

Abstract: A primary challenge for alibi generation research is establishing the ground truth of the real world events of interest. We used a smartphone app to record data on adult participants for a month prior to a memory test. The app captured their accelerometry continuously and their GPS location and sound environment every ten minutes. After a week retention interval, we asked participants to identify where they were at a given time from among four alternatives. Participants were incorrect 36% of the time. Furthermore, our forced choice procedure allowed us to conduct a conditional logit analysis to assess the relative importance of different aspects of the events to the decision process. We found strong evidence that participants confuse days across weeks. In addition, people often confused weeks in general and also hours across days. Similarity of location induced more errors than similarity of sound environments or movement types

Although generally very pessimistic, a substantial proportion of individuals believes that national & global economy will be doing worse than their household (a financial ”better-than-average effect”)

Barrafrem, Kinga, Daniel Västfjäll, and Gustav Tinghög. 2020. “Financial Well-being, COVID-19, and the Financial Better-than-average-effect.” PsyArXiv. April 30. psyarxiv.com/tkuaf

Abstract: At the onset of the COVID-19 outbreak we conducted a survey (n=1000) regarding how people assess the near future economic situation within their household, nation, and the world. Together with psychological factors related to information processing we link these prospects to financial well-being. We find that, although generally very pessimistic, a substantial proportion of individuals believes that national and global economy will be doing worse than their household, what we call a financial ”better-than-average effect”. Furthermore, we find that private economic outlook and financial ignorance are linked to financial well-being while financial literacy and the (inter)national situation are not.