   Cognitive Dissonance the downfall of Capitalism?
  I thought I understood the idea of cognitive dissonance - it sounds pretty simple when put into basic english. To make sure before I used the term in a post several months ago, I looked it up on wikipedia, which confirmed the basic idea as I understood it. It also provided links to other sites that linked to studies, and I found the results rather disturbing - the effect was FAR stronger than I understood it to be, and that planted a seed that's been growing for a while now.My hypothesis is that cognitive dissonance is the downfal of capitalism.Capitalism is based on the idea that consumers are somewhat informed about the things they make decisions about. In the real world, people are rarely as informed as they should be (IMO), but even so, it's either not failing (on it's own) or failing very slowly such that it doesn't appear to be failing.Enter cognitive dissonance - without it, uninformed people might eventually feel the weight of their poor decisions (unless they're completely oblivision) and might attempt to become more informed (either directly or by using an informed proxy for executing decisions). However, because of cognitive dissonance (and overinflated egos), people not only fail to recognize their poor decisions but also convince themselves that their decisions are actually good ones for whatever false reasons.For example, I know a few people that play MMORPGs. They started out buying the game and having a bit of fun. Whenever something frustrated them in-game, it was ok because "it's an MMO, there will be lots of updates". Sometimes the updates came, sometimes they didn't. By that time, though, the person had already invested a large amount of money and time in the game. They don't find the game in itself fun anymore (based on the way they talk about it), but cognitive dissonance convinces them otherwise. Most of those people now use MMORPGs as nothing more than a social club, with the level of interaction rarely topping what IRC offers. Despite not liking or needing the game, each of them still puts a signicant amount of time and money into the game. These people are not complete idiots as far as I can tell, so the only explanation I can think of is cognitive dissonance. After investing the initial purchase price of the game, they must play it some to get their money's worth. After that, they must continue playing to make their investment stay meaningful.I think that cognitive dissonance pervades every aspect of our lives, and once marketing tricks a person into buying a bad product, that person unconsciously convinces himself/herself that he/she is above being tricked and thus the decision to buy that product was actually a good one.Thoughts/Comments/Suggestions/Ravings?   
  self preservation instincts -> selfishness -> greed : humanCapitalism has no care for fellows. Perhaps it may be better to rephrase that coping mechanisms to rid of dissonance may be a factor in what allows one to live with failure of communsism? socialism? I suspect those who drive these systems of power do not behave in a manner conflicting with their ideals, beliefs and actions though. Perhaps those who would rebel may use such mechanisms to justify their progressively decaying moral actions though, as Snowball the pig becomes no better than the farmer.   ;Quote:Capitalism is based on the idea that consumers are somewhat informed about the things they make decisions about.No it's not. The information level of consumers has little to do with capitalism itself. In fact, many of the the features of goods and services in our economy arise because of an imperfect information level. For instance, capitalistic competitive rivalry encourages firms to offer assurances of security to imperfectly informed consumers, using things like money-back guarantees or product warranties, and by building customer loyalty through investing in their brand names and reputations.Brand names are very profitable for firms. Observe, for instance, the enormous price difference between an Apple MacBook Pro and a laptop of equivalent power, which may sell for as much as $1,000 less. But in a sense, they also benefit consumers by reducing the amount of time they must spend searching for a product that's what they want; they already know something about the company from previous purchases. You pay, in effect, for quality assurance.Quote:However, because of cognitive dissonance (and overinflated egos), people not only fail to recognize their poor decisions but also convince themselves that their decisions are actually good ones for whatever false reasons.This seems silly. If you make a bad emotional decision ("honey, that dress makes you look fat"), it's easy to convince yourself that you made a good one ("well, she wanted me to be honest, so I did the right thing"), because emotions are subjective. So a theory of cognitive dissonance would seem to work well here: everyone is susceptible to the "sour grapes" effect.But when your bank account is depleted or your grades slip, you are being faced with an objective number that cannot be denied. You may try to rationalize away the reason that it happened ("I knew that iPod battery salesman was a scammer", or "my psychology professor hates me"), but there is no denying the truth of the matter based on the numbers. That is, you cannot say "I'm a millionaire" or "I made the dean's list" without flat-out lying or being delusional if you're also confronted with the numbers. So a theory of cognitive dissonance works poorly (or at least, less well) with an objective metric like money or GPA.Perhaps the surest proof that cognitive dissonance is not going to be the "downfal [sic] of capitalism" is your own words:Quote:In the real world, people are rarely as informed as they should be (IMO), but even so, it's either not failing (on it's own) or failing very slowly such that it doesn't appear to be failing.Cognitive dissonance is an intrinsic quality of human psychology and has thus been around forever, whereas capitalism is an economic invention of the past 300 years or so. Isn't the better explanation that cognitive dissonance has little effect on day-to-day capitalism?   ;Quote:Original post by kSquaredThis seems silly. If you make a bad emotional decision, it's easy to convince yourself that you made a good one, because emotions are subjective. So a theory of cognitive dissonance would seem to work well here: everyone is susceptible to the "sour grapes" effect.But when your bank account is depleted or your grades slip, you are being faced with an objective number that cannot be denied. You may try to rationalize away the reason that it happened ("I knew that iPod battery salesman was a scammer", or "my psychology professor hates me"), but there is no denying the truth of the matter based on the numbers. That is, you cannot say "I'm a millionaire" or "I made the dean's list" without flat-out lying or being delusional if you're also confronted with the numbers. So a theory of cognitive dissonance works poorly (or at least, less well) with an objective metric like money or GPA.The theory of cognitive dissonance is a far reaching and contraversial (with respect to scope) theory. Much can be explained in terms of it including not making dean's list, bank account or numbers. For example, if you dont make the dean' list you may claim the teacher is biased, the school is rigged, the school is no good for one such as you, such things as dean's list are not important. It is necessary to put down others and bring yourself to maintain a healthy self image. Those who are often used to illustrate dissonance are those in an abusive relationship, no one gets more hard evidence agaisnt their beliefs (in a loving relationship) than they, yet they choose to maintain their illusions. Or those in a cult, regardless of the evidence given contrary to their absurdities they choose to maintain it. Indeed, everytime a person is presented evidence and they choose to continue their contrasting beliefs they make it harder to escape their delusions because they have had to dig themselves further in so to speak. A state of dissonance is something that is always worked to be ridded by convincing oneself contrary to the evidence because it is much harder to reorganize one's schemas.   ;Quote:Original post by DaeraxQuote:Original post by kSquaredThis seems silly. If you make a bad emotional decision, it's easy to convince yourself that you made a good one, because emotions are subjective. So a theory of cognitive dissonance would seem to work well here: everyone is susceptible to the "sour grapes" effect.But when your bank account is depleted or your grades slip, you are being faced with an objective number that cannot be denied. You may try to rationalize away the reason that it happened ("I knew that iPod battery salesman was a scammer", or "my psychology professor hates me"), but there is no denying the truth of the matter based on the numbers. That is, you cannot say "I'm a millionaire" or "I made the dean's list" without flat-out lying or being delusional if you're also confronted with the numbers. So a theory of cognitive dissonance works poorly (or at least, less well) with an objective metric like money or GPA.The theory of cognitive dissonance is a far reaching and contraversial (with respect to scope) theory. Much can be explained in terms of it including not making dean's list, bank account or numbers. For example, if you dont make the dean' list you may claim the teacher is biased, the school is rigged, the school is no good for one such as you, such things as dean's list are not important. It is necessary to put down others and bring yourself to maintain a healthy self image.Note that I agreed that cognitive dissonance enables people to rationalize away the reason behind something objective happening, citing the example of blaming your psychology professor when your grades drop. But those same people cannot deny that their grades did, in fact, drop, regardless of the reason. If they do, they are either lying or delusional.   ;  Cognitive dissonance, hmm... Sounds a lot like cronic loser syndrome (CLS).  Anyway, there is no one psychological influence that dominates human behavior.  Our descisons and actions may include some emotion, but they will likely include some objective reasoning as well.Regardless it is not the downfall of capitolism, if anything it supports it.  Just as kSquared noted, capitolism can thrive from the lack of information and the poor judgements that stem from it.  If anything, capitolism is the downfall of cognitive dissonance.  After all, those who are most afflicted by it are gauranteed to stay at the bottom of the ladder (*edit* I can't believe that I spelled that with two t's...).In essence, in the world of capitolism... the cronic losers will fail while the ambitious advantage taking deceivers inherit the earth.[Edited by - T1Oracle on June 18, 2006 10:17:13 PM];  I think this theory has far more reaching effects than it suggests.I have a couple of friends who aren't doing very well in the job market. Every time we talk about it it's the same old song. The market is bad, we didn't go to ivy school, blah, blah, blah. To me it's evident that they could easily get a job if they went through a couple of simple steps - changed their garbage resume, and actually *learned* something about their field. Yet every time I try to bring this up my suggestions fall on deaf ears.In general, I found that very few people can objectively link their decisions with the outcomes. Interestingly, I think that it doesn't necessarily apply to goods and services. When people get a bad cell phone services, get screwed out of their rebates, or generally get a bad deal or a dissatisfying service they tend to know that they were cheated.May be the theory is more relevant when it comes to broken careers and relationships than to buying crappy things.EDIT: also, that's what friends are for. People suck at being objective when it comes to themselves, but sometimes things are obvious when they're looking at someone else. If you have a group of friends that has a culture of being honest, that's the deterrent of the theory from taking hold.   ;  If I follow you correctly, you're saying that since part of capitalism relies on consumer knowledge to help drive the production of useful and effective things, if users aren't well informed, then crappy products/services can be made more cheaply, and sell for the same, thus undermining the progressive nature of a free market system that is suppose to drive innovation and improvement.  To which I mostly agree, though I would expect a (slower) form of natural selection, so to speak, to take over the intended artificial (consumer) selection.  (Unfortunately, sometimes this natural selection involves selecting the better marketing firms, rather than the better products.)But I figure we're already there, more or less.  We have this messy mix of informed consumers, oblivious consumers, and groups that try to make money off of obvlivious consumers by doing the research for them, and telling them what to buy.  A messy mix of proper consumer selection of products/services, for-profit groups' selection of products/services, and uninformed consumer selection that still tries to have better stuff than the neighbors.Capitalism has already been undermined by things such as consumer stupidity.  It's not nearly as wonderful as the ideal that is presented by certain free market defenders.  But I don't expect it to get any worse anytime soon; at least not due to consumer incompetence.  The system as it exists today is in fact highly dependent upon consumer incompetence.  I can only imagine how many people would be out of a job if all consumers all of a sudden became informed.   ;Quote:Original post by kSquaredQuote:Original post by DaeraxQuote:Original post by kSquaredThis seems silly. If you make a bad emotional decision, it's easy to convince yourself that you made a good one, because emotions are subjective. So a theory of cognitive dissonance would seem to work well here: everyone is susceptible to the "sour grapes" effect.But when your bank account is depleted or your grades slip, you are being faced with an objective number that cannot be denied. You may try to rationalize away the reason that it happened ("I knew that iPod battery salesman was a scammer", or "my psychology professor hates me"), but there is no denying the truth of the matter based on the numbers. That is, you cannot say "I'm a millionaire" or "I made the dean's list" without flat-out lying or being delusional if you're also confronted with the numbers. So a theory of cognitive dissonance works poorly (or at least, less well) with an objective metric like money or GPA.The theory of cognitive dissonance is a far reaching and contraversial (with respect to scope) theory. Much can be explained in terms of it including not making dean's list, bank account or numbers. For example, if you dont make the dean' list you may claim the teacher is biased, the school is rigged, the school is no good for one such as you, such things as dean's list are not important. It is necessary to put down others and bring yourself to maintain a healthy self image.Note that I agreed that cognitive dissonance enables people to rationalize away the reason behind something objective happening, citing the example of blaming your psychology professor when your grades drop. But those same people cannot deny that their grades did, in fact, drop, regardless of the reason. If they do, they are either lying or delusional.My bad. I totally misperceived the thrust of this thread. I agree congnitive dissonance on its own will have no effect on capitalism, if anything it will work for it by selecting agaisnt those who would not think logically.   ;Quote:Original post by kSquared[...]No it's not. The information level of consumers has little to do with capitalism itself.[...]Perhaps 'free market' might have been a better choice than 'capitalism'?Quote:[...]In fact, many of the the features of goods and services in our economy arise because of an imperfect information level. For instance, capitalistic competitive rivalry encourages firms to offer assurances of security to imperfectly informed consumers, using things like money-back guarantees or product warranties, and by building customer loyalty through investing in their brand names and reputations.[...]IMO, the way such things as guarantees and warranties are used is a good demonstration of cognitive dissonance at work. Perhaps my experiences are unique, but I've seen several otherwise intelligent people buy products because of the 'security assurance' period and then fail to take advantage of it when it would help because "it's too much hastle" only to but another similar product for the same reason as the first.Quote:[...]Brand names are very profitable for firms. Observe, for instance, the enormous price difference between an Apple MacBook Pro and a laptop of equivalent power, which may sell for as much as $1,000 less. But in a sense, they also benefit consumers by reducing the amount of time they must spend searching for a product that's what they want; they already know something about the company from previous purchases. You pay, in effect, for quality assurance.[...]"Quality assurance" and "quality" are not at all the same thing. A liar's assurance isn't very meaningful, reguardless of how much it costs.Quote:[...]there is no denying the truth of the matter based on the numbers.[...]There might not be any denying that "I'm now several thousand dollars in debt", but there is certainly denying that it is a bad thing. I've seen this from a few people as well - they'll buy a new vehicle they can't afford with worse fuel effeciency than the vehicle they had before and call it a good decision for numerous reasons that are barely sane enough to be called nonsense.Quote:[...]Perhaps the surest proof that cognitive dissonance is not going to be the "downfal [sic] of capitalism" is your own words:Quote:In the real world, people are rarely as informed as they should be (IMO), but even so, it's either not failing (on it's own) or failing very slowly such that it doesn't appear to be failing.[...]I was, of course, not saying capitalism will be gone tommorow, but rather asserting the latter of the two statements I made above - that it's failing very slowly such that it's not obvious it's failing (if it were obvious, I wouldn't need to ask anybody else =-).Quote:[...]Cognitive dissonance is an intrinsic quality of human psychology and has thus been around forever, whereas capitalism is an economic invention of the past 300 years or so. Isn't the better explanation that cognitive dissonance has little effect on day-to-day capitalism?As you say, capitalism hasn't been around very long, so it hasn't stood the test of time quite yet =-) Those systems before it lasted much longer and still they fell eventually.   