Category Archives: Emotion and Motivation

How Netflix just made a bad thing worse

By Kevin R. Betts

Netflix witnessed a storm of customer outrage and tumbling stock prices this month as they dramatically increased their price for subscription to the service. Early this morning, CEO Reed Hastings reacted with an email to customers. The email started, “I messed up. I owe you an explanation.” And an explanation did follow – not only about why the price hike would continue, but also about how subscribers would now be paying for two services, Netflix and Qwikster, if they wished to continue with the full set of features previously provided. I predict that this latest move will lead to even more problems for the company.

I am a longtime subscriber to Netflix and enjoy their DVD and streaming services immensely. Sure, I was irritated with the dramatic price increase just like many other customers. But I accepted it and opted to continue receiving their services. The latest change has led me to reconsider my options, however. I enjoy movies and television, but do I really need to subscribe to more than one independent service provider for this? I never saw a reason to subscribe to Hulu plus or Amazon Prime for their video services because Netflix was already meeting my needs. So why should I subscribe to both Netflix and Qwikster? I shouldn’t and I now intend to update my video subscription service accordingly.

What Netflix must realize is that my decision to opt out of one service has little to do with its actual price. Hastings makes clear in his email to customers that “There are no pricing changes (we’re done with that!).” Rather, it is my perception that has changed. I do not want to pay for two very similar video services. And I predict that many other customers will think and react similarly. Consider research addressing the effectiveness of partitioned versus bundled pricing. Sheng, Bao, and Pan (2007) state, “It is profitable to partition a total price into two separate parts only when the surcharge is relatively small compared to the base price, or the surcharge has a well-justified purpose. Otherwise, an all-inclusive price might generate higher purchase intentions, thus increasing demand.” Not only did Netflix partition its prices in such a way that has already proved to drive away customers, but they now want us to continue our patronage through two independent service providers. And away go another group of subscribers.

I hope that Netflix has thought about this issue more than I have because it is likely to have long-term consequences for their success as a company. Dramatic price hikes this month drove enough customers away. Making it psychologically easier for us to forgo their services is unlikely to make things better.

Read more:

Netflix renames DVD-by-mail service, adds video games (CNN)

Sheng, S., Bao, Y., & Pan, Y. (2007). Partitioning or bundling? Perceived fairness of the surcharge makes a difference. Psychology and Marketing, 24, 1025-1041.

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Should Pakistan be considered a terrorist state?

By Kevin R. Betts

When the U.S. SEAL team raided Osama bin Laden’s compound in Pakistan earlier this month, they did so without any approval from Pakistani officials. They covertly flew helicopters into the region, raided the compound in a fierce firefight, and killed bin Laden and several others. The secretive nature of this raid follows from years of American distrust toward Pakistan, an ostensible ally in the fight against terrorism. Recent events have merely added fuel to the fire. Given that the U.S. was able to locate bin Laden from thousands of miles away, Americans are now asking why Pakistani military and intelligence agencies couldn’t do the same within their own country. Bin Laden resided in an elaborate compound only 80 miles from the Pakistani capital of Islamabad, and just 800 yards from a major military academy. Was Pakistan truly unaware of bin Laden’s whereabouts, or were they complicit in maintaining his cover?

The nature of this question poses an international Prisoner’s Dilemma. Emerging from game theory, the Prisoner’s Dilemma demonstrates why two parties might not cooperate even if it is in both of their best interests to do so. Generally, such situations require that each party choose between cooperating and defecting with the interests of an adversary. In the present scenario, Pakistan can choose to cooperate with the fight against terrorism or not. Salman Rushdie from Newsweek points out that “Pakistan is alarmed by the rising Indian influence in Afghanistan, and fears that an Afghanistan cleansed of the Taliban would be an Indian client state, thus sandwiching Pakistan between two hostile countries.” However, Pakistan also receives billions of military and intelligence boosting dollars from the United States. Thus, it may be in Pakistan’s interests to ignore certain terrorist activities (defect) while simultaneously appearing bound to U.S. interests (cooperate).

Defecting can grant the most valued outcome in a Prisoner’s Dilemma because it does not require compromise with the adversary’s demands, but this outcome is realized only if the other party chooses to cooperate at the same time. For instance, Pakistan could ignore (or support) terrorist activities while still accepting U.S. funds. If both parties choose to defect, the least valued outcome will result. In this scenario, Pakistan loses U.S. funding and the U.S. loses an ally in the fight against terrorism. Mutual cooperation grants each party a moderately valued but mutually beneficial outcome. Given that the United States has cooperated with Pakistan by providing monetary assistance, it is hoped that they will cooperate as well by assisting in the fight against terrorism.

Given this international Prisoner’s Dilemma, the U.S. must now make judgments about whether Pakistan has cooperated or defected. Many have argued that Pakistan has long been defecting, and that their apparent lack of knowledge about Bin Laden’s whereabouts reveals that this defection continues. Others argue that despite select intelligence failures, Pakistan remains an important ally to the U.S. in a region laden by terrorist threats. Whether the U.S. perceives Pakistan as having cooperated or defected will likely influence their decision about whether they should cooperate or defect themselves. What do you think? Should the U.S. continue to consider Pakistan an ally, or do recent events require a change in perspective?

Read more:

Pakistan: A Terrorist State (Newsweek)

Evans, A.M., & Krueger, J.I. (2009). The psychology (and economics) of trust. Social and Personality Psychology Compass, 3, 1003-1017.

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First Birthers, now Deathers… Why so many conspiracy theories?

By Erica Zaiser

Just after the “birthers” lost some footing with US President Obama’s release of his full birth certificate, the “deathers” have begun to question the validity of the news that Osama Bin Laden has been killed. Conspiracy theories have always been around but lately they have been getting a lot of media attention. What makes someone more likely to believe in conspiracy theories? 

Researchers have suggested that people may be more likely to believe in conspiracy theories when they feel a lack of control because conspiracy theories may help to explain their current situation or reaffirm their belief that other people control the world around them. Also, people who are strongly suspicious of authority may be more likely to believe authorities are conspiring. Furthermore, conspiracy theories can simplify situations that may actually be quite complex. Indeed, a number of related personality characteristics have been linked to belief in conspiracy theories, including low self-esteem, authoritarianism, and powerlessness.

Very recently, Douglas and Sutton (2011) found that people are more likely to believe in conspiracy theories when they themselves are more willing to engage in conspiratorial behaviour. Thus, the very people shouting conspiracy are more likely themselves to conspire. So perhaps we need to take a close look at what is going on behind the scenes with these “birthers” and “deathers”, maybe they are conspiring to make the media blow their claims out of proportion. 

Read more: Belief in Conspiracy Theories. Political Psychology. 

Does it takes one to know one? Endorsement of conspiracy theories in influenced by personal willingness to conspire

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Inspire magazine: Senseless extremist propaganda or effective recruitment tool?

Inspire Magazine, Spring Edition

By Kevin R. Betts

As millions of Americans tune in to news coverage about the death of Osama Bin Laden this week, a much smaller but equally ambitious group of Westerners are carefully reading and perhaps adopting the views put forth by contributors to the Spring issue of Inspire magazine. Contributors to this controversial and provocative English online magazine hope to inspire Western youth to take violent action against fellow Westerners in defense of Islam. In the most recent issue, contributors celebrate killings of Western service men and women, provide guidance on how to operate a Kalashnikov rifle, and discuss how current protests in the Middle East may be beneficial for terrorist groups such as al Qaeda. Before we write this magazine off as senseless extremist propaganda, let’s take a moment to seriously consider whether Inspire might actually be effective in at least partially meeting its intended goals.

Like other magazines, Inspire exerts both informational and normative influence over its readers. The information the magazine provides is of considerable value to its readers because it is unique and difficult to find through other means. Without explicit training, most Westerners wouldn’t know how to operate a Kalashnikov rifle. Likewise, few if any Western news contributors express the view that current protests in the Middle East may be beneficial to groups such as al Qaeda. Inspire provides English speaking readers with unique and valuable information that is not available to them through traditional venues. The normative influence that Inspire exerts over its readers is more subtle. The prevailing view among Westerners seems to be that violence enacted in defense of Islam is deplorable. Inspire suggests that this violence is not only legitimate, but desirable. Knowing that they have the support of others, readers that accept this divergent perspective may begin to engage in new behaviors that are consistent with it. These behaviors may range from mere support for extremist goals endorsed by the magazine to actual violence against Westerners. Inspire seems to effectively provide information that interested readers consider valuable, and presents this information in a light that makes it appear normative.

So Inspire may be at least partially effective in meeting its goals. English speaking Westerners—perhaps even some of your friends and neighbors—will read this magazine and make judgments about it. Some of these judgments will be in favor of the views expressed by contributors to the magazine. What do you think? Will Inspire inspire many Westerners to support and/or engage in violent defense of Islam? Or will its message fall on deaf ears along with other senseless extremist propaganda?

Read more:

Bin Laden is dead, Obama says (New York Times)

Chilling tips in al-qaeda magazine (Al Jazeera)

Smith, J.R., & Louis, W.R. (2009). Group norms and the attitude-behavior relationship. Social and Personality Psychology Compass, 3, 19-35.

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