Found 19 article(s) for author 'Michael I. Norton'

Procedural Justice and the Risks of Consumer Voting

Procedural Justice and the Risks of Consumer Voting. Leslie John, Michael I. Norton, 2019, Paper, “Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.Link

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The Secret to Getting More People to Pay Their Taxes

The Secret to Getting More People to Pay Their Taxes. Michael I. Norton, February 11, 2018, Opinion, “When people feel that they don’t have a voice in determining what their government does, they often check out of the political process. One result of that: They do what they can to avoid taxes. But there’s a way to change the way people feel—and increase tax compliance in the process.Link

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Consumers Avoid Buying from Firms with Higher CEO-to-Worker Pay Ratios

Consumers Avoid Buying from Firms with Higher CEO-to-Worker Pay Ratios. Rohit Deshpandé, Michael I. Norton, January 31, 2018, Paper, “We document a novel driver of consumer behavior: pay ratio disclosure. Swiss corporation performance data gathered during a legally mandated pay ratio referendum reveals that salient high pay ratios are associated with decreased firm sales (Pilot Study). An incentive-compatible field experiment shows that, when ratios are revealed, consumers avoid firms with high ratios relative to competitors (Study 1).Link

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Time, Money, and Subjective Well-Being

Time, Money, and Subjective Well-Being. Ashley Whillans, Michael I. Norton, 2017, Paper, “Time and money are scarce and precious resources: people experience stress about having insufficient time, and worry about having insufficient money. This chapter reviews research showing that the ways in which people spend their time and money, the tradeoffs that people make between having more time or having more money, and the extent to which people focus on each resource can have a significant impact on happiness. Considering subjective well-being (or “happiness”) as a combination of high positive affect, low negative affect, and high feelings of life satisfaction, we explore when, how, and why time and money impact peoples’ anticipated, momentary, and lasting happiness.Link

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(Mis)perceptions of Inequality

(Mis)perceptions of Inequality. Michael I. Norton, July 24, 2017, Paper, “Laypeople’s beliefs about the current distribution of outcomes such as income and wealth in their country influence their attitudes towards issues ranging from taxation to healthcare–but how accurate are these beliefs? We review the burgeoning literature on (mis)perceptions of inequality. First, we show that people on average misperceive current levels of inequality, typically underestimating the extent of inequality in their country. Second, we delineate potential causes of these misperceptions, including people’s overreliance on cues from their local environment, leading to their erroneous beliefs about both the overall distributions of wealth and income and their place in those distributions. Third, we document that these (mis)perceptions of inequality—but not actual levels of inequality—drive behavior and preferences for redistribution. More promisingly, we review research suggesting that correcting misperceptions influences preferences and policy outcomes.Link

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Social Recycling Transforms Unwanted Goods into Happiness

Social Recycling Transforms Unwanted Goods into Happiness. Michael I. Norton, December 8, 2016, Paper, “Consumers are often surrounded by resources that once offered meaning or happiness but that have lost this subjective value over time—even as they retain their objective utility. We explore the potential for social recycling—disposing of used goods by allowing other consumers to acquire them at no cost—to transform unused physical resources into increased consumer happiness. Six studies suggest that social recycling increases positive affect relative to trash, recycling, and donations of goods to nonprofit organizations. Both perceptions of helping the environment and helping other people drive this increase in positive affect. We conclude that social recycling offers a scalable means for reengineering the end of the consumption cycle to transform unused resources into happiness. We suggest that further research should continue to enrich a general theory of disposition, such that we are able to maximize the ecological, interpersonal, and community utility of partially depleted resources.Link

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Invisible Inequality Leads to Punishing the Poor and Rewarding the Rich

Invisible Inequality Leads to Punishing the Poor and Rewarding the Rich. Michael I. Norton, November 10, 2016, Paper, “How does lack of awareness of income inequality affect behaviour towards the rich and poor? To address this question, we assigned participants either at random or based on merit to one of five income levels (reflective of the U.S. income distribution), who then played a repeated public goods game with punishment, reward or both. When participants did not know the income distribution, they punished the poor and rewarded the rich.Link

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Tax Aversion in Labor Supply

Tax Aversion in Labor Supply. Michael I. Norton, April 2016, Paper. “In a real-effort laboratory experiment, labor supply decreases more with the introduction of a tax than with a financially equivalent drop in wages. This “tax aversion” is large in magnitude: when we decompose the productivity decrease that arises from taxation, we estimate that 40% is due to the lower net wage and the remaining 60% to tax aversion. This tax aversion affects labor supply more on the extensive margin (working less) than on the intensive margin (being less productive while working). The aversion is equally strong whether tax revenue goes to the U.S. government or back to the experimenter (a “laboratory tax”). We discuss the implications of our results for the relationship between labor supply and taxation.Link

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BUYING TIME: The Science of Happier Spending

BUYING TIME: The Science of Happier Spending. Michael I. Norton, Winter 2016, Paper. “MANY OF US WISH WE HAD MORE FREE TIME to do what we love — whether it be working out, reading or playing guitar. In theory, it is possible to use the money we earn to ‘buy’ more of this kind of time; but research suggests that even when we can afford to do so, we are not spending our time in more enjoyable ways on a regular basis.Link

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Time, Money, and Happiness

Time, Money, and Happiness. Michael I. Norton, November 4, 2015, Paper. “We highlight recent research examining how people should manage their most precious resources – time and money – to maximize their happiness. Contrary to people’s intuitions, happiness may be less contingent on the sheer amount of each resource available and more on how people both think about and choose to spend them. Overall, focusing on time leads to greater happiness than focusing on money. Moreover, people enjoy greater happiness from spending money on others rather than themselves and from acquiring experiences instead of possessions. Similarly, people enjoy greater happiness from spending time on or with others and from acquiring experiences – both extraordinary and ordinary.Link

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