Issue link: https://www.e-digitaleditions.com/i/42073
Fifth Annual Beard Symposium Sustainable Business: Responsibility & Results November 10, 2011 • 8:00 a.m.- 2:00 p.m • Fairmont Hotel • Pittsburgh, PA Chris Park Peter Senge Ted Senko Zoe Tcholak-Antitch Senior Lecturer, Massachusetts Institute of Technology; author of The Necessary Revolution Global Chief Executive, Climate Change & Sustainability Services, KPMG Principal of Sustainability, Energy and Environment Practice, Deloitte Director, North America, Carbon Disclosure Project For more information, visit www.duq.edu/beardsymposium What Drives Short-Term Thinking? HOW DO PEOPLE choose whether to spend their money on those expensive shoes or televisions now or save that sum for the future? The key is in their abil- ity to envision how "psychologically con- nected" they are to their "future selves," say two researchers from Columbia Business School in New York City and the Univer- sity of Chicago Booth School of Business in Illinois. Daniel Bartels People too often choose short-term rewards over long-term gains because they have no "continuity of self," say Daniel Bartels, assistant professor of mar- keting at Columbia, and Oleg Urminsky, assistant professor of marketing at Booth. That is, they believe that who they are today will be vastly different from who they'll be in the future. The result can be short-term thinking. Oleg Urminsky Bartels and Urminsky put this theory to the test in five studies. In one, they asked 141 college seniors nearing graduation to complete a survey; in return, they would be entered into a lottery for a gift certificate. Before completing the survey, one group of students read a passage that described graduation as a change that would affect their identities dramatically; a second group read a passage that described it as a change that would not affect their identities to a large extent. Then, all participants chose to enter one of two lotter- ies—one for a $120 gift certificate to be delivered in one week, or one with a gift certificate for a larger amount to be delivered in a year. The students who were told that graduation presaged a major identity change were more likely to choose the "smaller-sooner" gift card, while those who were told their identities would remain stable were more likely to choose the "larger-later" card. In subsequent studies, the researchers found that peo- ple who were disconnected from their future selves also were less likely to wait to purchase a big-ticket item on sale and more likely to pay to receive a gift card earlier. While short-term thinking is often attributed to a lack of willpower, the researchers believe that "people recog- nize the likelihood that in the future they may regret con- sistently choosing not to indulge." "On Intertemporal Selfishness: The Perceived Insta- bility of Identity Underlies Impatient Consumption" is available at home.uchicago.edu/ourminsky/Bartels_ Urminsky_Intertemporal_Selfishness_2010.pdf. BizEd September/October 2011 67