Feeling sad? It’ll cost you
Just as you wouldn’t let a friend drive drunk, you might not want to let a friend make financial decisions while sad. In several experiments, people who were put in a sad mood—by watching a sad video and writing about a sad experience—sought more immediate gratification, preferring smaller, immediate rewards over larger, delayed rewards.
Lerner, J. et al., “The Financial Costs of Sadness,” Psychological Science (forthcoming).
Evidence? But she looks so nice!
Criminal suspects may have the right to be tried “by an impartial jury,” but that doesn’t mean that jurors are magically rid of human psychology. In a new study, researchers presented mock jurors with transcripts or videos of trials for violent crimes but varied the strength of the evidence and whether the defendant was male or female. The strength of the evidence mattered much less in determining judgments of guilt for female defendants; the jurors also spent more time looking at female defendants than male defendants during the video presentation. The authors of the study conclude that defendants who defy stereotypes—in this case, females accused of violent crime—act as novelties, so that jurors pay more attention to who they are and less attention to what they did.
McKimmie, B. et al., “Stereotypical and Counterstereotypical Defendants: Who Is He and What Was the Case Against Her?” Psychology, Public Policy, and Law (forthcoming).
Political corporations hurt shareholders
In the Citizens United decision, the Supreme Court ruled that “no sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” But a recent analysis by a professor at Harvard Law School suggests that political action by corporations undermines corporations themselves, or at least their shareholders. The analysis found that corporate political activity among the S&P 500 increased after the Citizens United decision, and that this increase was associated with “a significant attendant drag on shareholder value.” Because corporate political activity was also associated with entrenched management—including greater CEO use of corporate jets—“it seems likely that politics and shareholder value influence each other, with lower value inducing politically inflected strategic gambles, and political engagements diluting strategic focus and inducing wasteful, politically inflected investments.”
Coates, J., “Corporate Politics, Governance, and Value Before and After Citizens United,” Journal of Empirical Legal Studies (December 2012).
I heart my brand-name placebo
Once someone gets attached to a brand-name medication, don’t mess with it! That’s the lesson of a new experiment on the placebo effect. Participants were given a pill that was supposedly a brand-name antianxiety medication and then, in a follow-up visit later that week, given a second pill that was either the same pill as in the first visit, a different brand-name version of the same medication, or a generic version of the same medication. All pills were actually placebos. Participants in the no-change group exhibited significantly larger placebo effects, including bigger drops in systolic blood pressure and anxiety, and fewer expected side effects.
Faasse, K. et al., “The Effect of an Apparent Change to a Branded or Generic Medication on Drug Effectiveness and Side Effects,” Psychosomatic Medicine (forthcoming).
The real currency maniuplators
Spurred by the loss of jobs to China, politicians and the media have practically turned China bashing into a sport. But are they aware of the consequences? A professor of economics at George Mason University finds that when there are more references in American newspapers to China’s currency—for being pegged at a level that many consider to be well below fair market value—the currency actually appreciates less, controlling for market and economic fundamentals. In other words, China bashing by Americans actually has an effect on exchange rates: It backfires. The analysis also reveals that “one of the most important determinants of congressional China bashing” is political contributions from pro-currency-reform interest groups, even controlling for a congressman’s ideology, party, constituent interests, and support for a currency-reform bill.
Ramirez, C., “The Political Economy of ‘Currency Manipulation’ Bashing,” China Economic Review (forthcoming).
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