The latent scope bias: Robust and replicable.

People appear to prefer explanations that minimize unobserved effects, a pattern known as the latent scope bias in explanatory reasoning. A recent set of studies published in Cognition argues that the bias can be elicited only in certain narrow conditions and with certain tasks, such as a forced-choice task (Stephan, 2023). This commentary assesses the robustness of the bias in two ways: it weighs the most recent discoveries against previous research, and it presents two new studies using the most general possible elicitation task, i.e., spontaneous written responses to problems designed to test for a latent scope bias. Across 35 previous studies, 7 studies published in Stephan (2023), and 2 new studies described herein, the overwhelming majority of studies showed that people preferred narrow latent scope explanations over broad ones. This analysis led us to conclude that the bias is both robust and replicable. Taken together, Stephan's (2023) contribution and our new analyses advance our understanding of explanatory reasoning behavior.

Financial constraint and perceptions of COVID-19.

In early March 2020, two crises emerged: the COVID-19 public health crisis and a corresponding economic crisis resulting from business closures and skyrocketing job losses. While the link between socioeconomic status and infectious disease is well-documented, the psychological relationships among economic considerations, such as financial constraint and economic anxiety, and health considerations, such as perceptions of disease spread and preventative actions, is not well understood. Despite past research illustrating the strong link between financial fragility and a wide range of behaviors, surprisingly little research has examined the psychological relationship between the economic crisis and beliefs and behaviors related to the co-occurring health crisis. We show that financial constraint predicts people's beliefs about both their personal risk of infection and the national spread of the virus as well as their social distancing behavior. In addition, we compare the predictive utility of financial constraint to two other commonly studied factors: political partisanship and local disease severity. We also show that negative affect partially mediates the relationship between financial constraint and COVID-19 beliefs and social distancing behaviors. These results suggest the economic crisis created by COVID-19 spilled over into people's beliefs about the health crisis and their behaviors.

Communicating amounts in terms of commonly used budgeting periods increases intentions to claim government benefits.

Millions of eligible families did not claim their 2021 expanded child tax credit (CTC), collectively forgoing billions of dollars. To address this problem, many policymakers focused on increasing awareness of the CTC by highlighting that families could receive up to $3,600 a year per child. However, people rarely budget on a yearly basis. We propose that communicating the CTC benefit amount in terms of commonly used budgeting periods (e.g., $300 a month) instead of uncommonly used budgeting periods (e.g., $3,600 a year) could increase interest in claiming the CTC. Two large-scale field experiments ([Formula: see text]) among low-income individuals support this account. Using common (vs. uncommon) budgeting periods to describe CTC benefit amounts increased CTC claiming intentions by 16 to 26%. A third large-scale field experiment ([Formula: see text]) demonstrated that encouraging people to consider different budgeting periods moderated these effects. These results suggest that communicating amounts in terms of common budgeting periods is a simple, cost-effective way to stimulate interest in claiming government benefits.

When a gain becomes a loss: The effect of wealth predictions on financial decisions.

When people make financial decisions, they need not only think about their current financial situation, but also about changes in future wealth. This work investigates people's beliefs about their future wealth and how these beliefs impact financial decisions. Using a joint experimental and computational cognitive modeling approach, we show that people's future beliefs serve as reference points when making investment decisions. These results are further supported by data from a large-scale cross-sectional survey (n = 4606) showing that people's beliefs about the future value of their assets are related to investment decisions between risky (i.e., stock market index) and safe (i.e., bond earning a fixed amount per year) options. In both the experiments and survey, we hypothesize that outcomes that are nominally stated as sure gains can become coded as losses due to belief-based reference points. This pattern leads to an increase in riskier choices across positive outcomes for individuals with optimistic beliefs about their future wealth.

The effect of effects on effectiveness: A boon-bane asymmetry.

Beliefs about how effective a cause will be at achieving possible outcomes are critical inputs into a range of decisions, from how to treat an illness to which products to purchase. We identify scope-the number of distinct outcomes a cause is known to achieve-as an important input into judgments of efficacy. We compare causes that lead to worse outcomes (i.e., banes) to those leading to improvements (i.e., boons). People believe that banes with broader scope (i.e., those that lead to more possible outcomes) are more effective and lead to stronger outcomes. In contrast, people believe that boons with narrower scope (i.e., those that lead to fewer possible outcomes) are more effective and lead to stronger outcomes. We document this pattern across four experiments, finding support for differences in mental models for boons and banes.

Valence in context: Asymmetric reactions to realized gains and losses.

The current research documents a novel pattern of preferences across nominally equivalent outcomes. When evaluating the outcome of completed experiences, people are sensitive to the magnitude of component (i.e., gross) gains and losses rather than responding solely to the net outcomes. However, people do not consistently favor outcomes that minimize losses (a pattern consistent with loss aversion), nor those that maximize gains (a pattern consistent with a positivity bias). Instead, preferences are context dependent. Holding net outcomes constant, people prefer positive outcomes that have lower magnitudes of component gains and losses. In contrast, people prefer negative outcomes that have higher magnitudes of component gains and losses. A shift in focus occurs such that people prioritize the contrasting attribute (e.g., negative when the net outcome is positive) in the evaluation process. The article concludes by discussing implications for a broad range of judgments and decisions. (PsycINFO Database Record

Leveraging Psychological Insights to Encourage the Responsible Use of Consumer Debt.

U.S. consumers currently hold $880 billion in revolving debt, with a mean household credit card balance of approximately $6,000. Although economic factors play a role in this societal issue, it is clear that psychological forces also affect consumers' decisions to take on and maintain unmanageable debt balances. We examine three psychological barriers to the responsible use of credit and debt. We discuss the tendency for consumers to (a) make erroneous predictions about future spending habits, (b) rely too heavily on values presented on billing statements, and (c) categorize debt and saving into separate mental accounts. To overcome these obstacles, we urge policymakers to implement methods that facilitate better budgeting of future expenses, modify existing credit card statement disclosures, and allow consumers to easily apply government transfers (such as tax credits) to debt repayment. In doing so, we highlight minimal and inexpensive ways to remedy the debt problem.

Framing charitable donations as exceptional expenses increases giving.

Many articles have examined the psychological drivers of charitable giving, but little is known about how people mentally budget for charitable gifts. The present research aims to address this gap by investigating how perceptions of donations as exceptional (uncommon and infrequent) rather than ordinary (common and frequent) expenses might affect budgeting for and giving to charity. We provide the first demonstration that exceptional framing of an identical item can directly influence mental budgeting processes, and yield societal benefits. In 5 lab and field experiments, exceptional framing increased charitable behavior, and diminished the extent to which people considered the effect of the donation on their budgets. The current work extends our understanding of mental accounting and budgeting for charitable gifts, and demonstrates practical techniques that enable fundraisers to enhance the perceived exceptionality of donations.

Many behavioral tendencies associated with right-leaning (conservative) political ideologies are malleable and unrelated to negativity.

Recent research has identified several judgment and decision making tendencies associated with right-leaning political ideologies that are difficult (if not impossible) to explain in terms of stable, negative affective appraisals because they (1) are uncorrelated with the negativity of the stimuli being considered, (2) do not reflect divergent affective evaluations, and (3) can be eliminated by superficial manipulations and interventions.

On assets and debt in the psychology of perceived wealth.

We studied the perception of wealth as a function of varying levels of assets and debt. We found that with total wealth held constant, people with positive net worth feel and are seen as wealthier when they have lower debt (despite having fewer assets). In contrast, people with equal but negative net worth feel and are considered wealthier when they have greater assets (despite having larger debt). This pattern persists in the perception of both the self and others. We explore consequences for the willingness to borrow and lend and briefly discuss the policy implications of these findings.

Harry Potter and the sorcerer's scope: latent scope biases in explanatory reasoning.

What makes a good explanation? We examine the function of latent scope, i.e., the number of unobserved phenomena that an explanation can account for. We show that individuals prefer narrow latent scope explanations-those that account for fewer unobserved effects-to broader explanations. In Experiments 1a-d, participants found narrow latent scope explanations to be both more satisfying and more likely. In Experiment 2 we directly manipulated base rate information and again found a preference for narrow latent scope explanations. Participants in Experiment 3 evaluated more natural explanations of unexpected observations, and again displayed a bias for narrow latent scope explanations. We conclude by considering what this novel bias tells us about how humans evaluate explanations and engage in causal reasoning.