Caught Out19. November 2012 by Joachim Goldberg
Sometimes even children can teach us a thing or two about behavioural economics. At least, I received an unexpected (and unwanted) lesson just a couple of weeks ago during a discussion about Christmas wish-lists.
“Paula got an iPad for her birthday, can I have one too?” my nine-year daughter asked me. Her friend Paula was born on the exactly the same day as my child, but she can just about read and her writing leaves much to be desired. Even Paula’s four-year old brother has his own iPad and he only attends kindergarten. So, for my daughter, it was a straightforward matter: she too deserved an Apple tablet. Among schoolchildren there are many possessions that count as positional goods – objects that are desired more for their ability to lift one’s social status than for their intrinsic value. An iPad can be a positional good only as long as very few people own them. This is why grown adults stood in line for days in front of the Apple store when it first came out. In primary schools, they are still sufficiently rare to qualify. I have learnt, though, that competition for positional goods only makes one unhappy. For this reason, I tried to discourage my daughter from entering into this futile race, and reminded her that what takes place in other families is no benchmark for me.
A few hours later, it was time for dinner. I asked my daughter if she would be kind enough to set the table. Her little brother was sitting around doing nothing in that moment so, of course, she tried to delegate the responsibility to him. Predictably, he refused to take any instructions from her and the exchange between the two of them quickly descended into an argument. In the meantime, the table remained empty. As the escalating row began to move away from the topic of setting the table, I interjected with a polite reminder for my now red-faced daughter:
“In a family each member has responsibilities. With three children and three meals a day, everyone has to reckon it will be his/her turn to set the table or clear away every now and again.” To conclude, and to bring the entire discussion to an end, I added:
“I am sure that in other families, the kids have to help out much more around the house.”
“But dad, when it came to Christmas gifts you didn’t care what happened in other households. Why do you bring up other families now when it comes to setting the table?”
She had got me: we like to use the norms set by neighbours, friends and work colleagues, but only when it comes to duties, not to privileges. It also became clear that, after all these years, I still value gains and loss unequally.