By Prof. Syon Bhanot (Swarthmore College)
My two best friends in high school were very high achievers. I was not quite at their level in my freshman and sophomore years - I chose to prioritize sports, endless reruns of The Simpsons, and eating too much ice cream over schoolwork and extracurricular activities. But eventually, their influence drove me to push myself harder in and out of the classroom.
My experience aligns with a number of studies in social psychology, behavioral economics, and related fields, which document our tendency to be strongly affected by the behaviors and decisions of our peers. Indeed, interventions using “social norms” to change behavior have sprung up everywhere, from electricity and water use to smoking cessation to towel re-use in hotels. But recent research suggests that our peers’ influence on us is not always so straightforward: sometimes when we see what our peers are doing, we don’t quite follow in their footsteps.
John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, and Katherine L. Milkman provide a fascinating example of how telling people what their peers are doing can induce people to change their behavior in surprising ways, in their paper, “The Effect of Providing Peer Information on Retirement Savings Decisions,” published in 2015 in The Journal of Finance. The authors conducted a field experiment at a manufacturing firm, in which individuals who were not participating in the firm’s retirement savings plan, or were participating at low levels, were encouraged to increase their contribution rates. The experiment was relatively simple: some workers received a letter without any peer information, and others received an identical letter, but with peer information (there were two ways they defined a “peer,” both based on age). The figures below show the two letter versions – you can see the peer information, emphasizing the percentage of people of a similar age who contributed to the retirement savings plan, highlighted in gray.
Given the power typically ascribed to social norms, one might expect this peer information to motivate people who did not previously save through the program to increase their contributions. After all, no one wants to be left behind by the crowd, right? However, what the authors found is precisely the opposite.
When those who were not previously saving in the program heard about how many of their peers were involved, they saved less than if they had not been told this information. Indeed, the difference was strongly significant, statistically speaking. The peer-information-free version of the letter induced 9.9% of recipients to sign up for the plan, while only 6.3% of those receiving the peer information letter signed up. Furthermore, the greater the percentage of one’s peers who were revealed to be saving for retirement, the less likely an individual was to start saving in the plan themselves.
What is going on here?
It turns out that using peer information as a tool for behavior change can have a pernicious, unanticipated effect: it might actually discourage people from improving, rather than encourage them to catch up to the pack. This result has its roots in work on demotivation and self-efficacy, where research suggests that people may avoid activities for which they feel poorly equipped, or succumb to what Beshears and co-authors call “discouragement from upward social comparison.”
This paper is not alone in finding evidence of adverse effects from peer and social information campaigns. In a recently published paper in the Quarterly Journal of Economics (available here), Leonardo Bursztyn and Robert Jensen find that the introduction of a “performance leaderboard” into computer-based high school classrooms resulted in a 24% decline in overall performance. Additionally, one of my own working papers on a water use reduction campaign in California (available here) finds a similar demotivational effect from poor performance in a competitively-framed ranked comparison. It turns out, when you tell people they are using a lot more water than their peers in the context of a friendly “competition,” it encourages them to increase, rather than decrease, their water use in the home.
What does this mean for “social norms” behavior change interventions more broadly? Well, first things first – let’s not be too negative. Using social norms to change behavior for the better remains an excellent behavioral nudge in many instances. That said, we need to be careful about using peer information to motivate people to improve. Perhaps the key here is to display peer information along with the message that self-improvement is within reasonable reach. Indeed, there is some evidence from recent research by Alice Hsiaw and Matthew Harding (available here), that people are much more likely to improve their behavior in the face of realistic goals than unrealistic ones. No one wants to get left in the dust by their peers – maybe knowing that you stand a chance of catching up is a key motivator to dust yourself off and start running.