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• Case | HBS Case Collection | October 2018 (Revised February 2019)

  Commonwealth Bank of Australia: Unbanklike Experimentation

  Ryan W. Buell and Leslie K. John

  In August 2017, Commonwealth Bank of Australia was looking for ways to differentiate itself from competing banks, and was also trying to improve the financial wellbeing of its customers. One domain where this was particularly relevant was in its bank-issued credit card business, where customers routinely selected cards that although profitable for the bank could be a poor fit for customers’ needs – leading to low satisfaction scores, cancellations, and occasionally, financial distress. To that end, the company’s Behavioral Economics team had developed a provocative experiment dubbed “The Good and the Bad.” Rather than just presenting the strengths of its various credit card offerings, they proposed also promoting each credit card’s less-obvious drawbacks. Being transparent with customers might help them make better choices, but would those choices come at the expense of bank performance? Should a company choose to be in the sales prevention business?

  Keywords: transparency; Banks and Banking; Credit Cards; Customer Focus and Relationships; Competitive Strategy;

  Citation:

  Buell, Ryan W., and Leslie K. John. "Commonwealth Bank of Australia: Unbanklike Experimentation." Harvard Business School Case 619-018, October 2018. (Revised February 2019.)  View Details

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• Working Paper | HBS Working Paper Series | 2019

  Calculators for Women: When Identity Appeals Provoke Backlash

  Tami Kim, Kate Barasz, Leslie John, Michael I. Norton, Tami Kim, Kate Barasz, Leslie John, Michael I. Norton, Tami Kim, Kate Barasz, Leslie John and Michael I. Norton

  From “Chick Beer” to “Dryer sheets for Men,” identity-based labeling is frequently deployed to appeal to people who hold the targeted identity. However, five studies demonstrate that identity appeals can backfire, alienating the very individuals they aim to attract. We begin by demonstrating backlash against identity appeals in the field during the 2016 presidential election (Study 1) and in the lab (Study 2). This (in)effectiveness of identity appeals is driven by categorization threat—feeling unwillingly reduced to a single identity—which is induced when a) the identity deployed is that of a typically marginalized group (Studies 3-4) and b) the appeal evokes a stereotype about that identity (Study 5). Ironically, identity appeals often drive identity-holders away from options they would have preferred in the absence of that appeal.

  Keywords: identity;

  Citation:

  Kim, Tami, Kate Barasz, Leslie John, and Michael I. Norton. "Calculators for Women: When Identity Appeals Provoke Backlash." Harvard Business School Working Paper, No. 19-086, February 2019.  View Details

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• Working Paper | HBS Working Paper Series | 2019

  The Revision Bias

  Ximena Garcia-Rada, Leslie John, Ed O’Brien, Michael I. Norton, Ximena Garcia-Rada, Leslie John, Ed O’Brien and Michael I. Norton

  Things change. Things also get changed—often. Why? The obvious reason is that revising things makes them better. In the current research, we document a less obvious reason: Revising things makes people think they are better, absent objective improvement. We refer to this phenomenon as the revision bias. Nine studies document this effect and provide insight into its psychological underpinnings. In Study 1, MBA students perceived their revised resumes to be of higher quality the more they differed from their original versions, but this perception was not justified: observers judged originals (inaccurately) labeled as revisions to be superior to revisions (inaccurately) labeled as originals. Study 2 pinpoints the direction of the effect: Revisions are appealing, as opposed to originals being unappealing. Moreover, the revision bias holds in a variety of settings in which the revision is devoid of objective improvement—when revisions are trivial (Study 3A), incidental (Study 3B), non-existent (Study 3C), and even objectively worse than the original (Study 3D). Study 4 directly tests the self-fulfilling nature of the revision bias, testing whether mere revision framing leads people to become less critical of the experience—in this study, less sensitive to possible bugs while playing an otherwise identical “revised” video game—and whether this mediates the effect of revision framing on positive evaluations. Studies 5A and 5B offer further support by testing whether the revision bias is accentuated when people engage in a holistic processing style, whether measured as an individual difference (Study 5A) or experimentally induced (Study 5B).

  Keywords: Change; heuristics and biases; framing; sequences; judgment; Change; Perception;

  Citation:

  Garcia-Rada, Ximena, Leslie John, Ed O’Brien, and Michael I. Norton. "The Revision Bias." Harvard Business School Working Paper, No. 19-087, February 2019.  View Details

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