The Role of Incentive Salience in Habit Formation

Leslie K. John; Katherine L. Milkman; Francesca  Gino; Bradford  Tuckfield; Luca  Foschini

Working Paper | HBS Working Paper Series | 2016

The Role of Incentive Salience in Habit Formation

by Leslie K. John, Katherine L. Milkman, Francesca Gino, Bradford Tuckfield and Luca Foschini

Abstract

Incentives can be powerful in motivating people to change their behavior, from working harder on tasks to engaging in healthier habits. Recent research has examined the residual effects of incentives: by altering behavior, incentives can cause participants to form habits that persist after the original behavior-altering incentives are removed. We conducted a field experiment with users of a pedometer-tracking app to examine whether the salience of incentives would affect their ability to produce habit formation in this context. We offered incentives to all participants and experimentally varied the salience of the incentives (i.e., whether participants received regular announcements about the incentives). Salient incentives produced significantly more behavior change and more lasting exercise habits than incentives presented without significant marketing. Through a difference-in-differences analysis comparing those in our experiment with a similar population, we show that the difference between offering no incentives at all and offering incentives that are not made salient is actually undetectable, whereas the difference between offering salient incentives and incentives that receive minimal marketing is quite stark. We discuss implications for research on incentives, habit formation, and exercise.

Keywords: Motivation and Incentives; Behavior;

Language: English

Format: Print

41 pages

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Citation:

John, Leslie K., Katherine L. Milkman, Francesca Gino, Bradford Tuckfield, and Luca Foschini. "The Role of Incentive Salience in Habit Formation." Harvard Business School Working Paper, No. 16-090, February 2016.

When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.

In a recent article published in Journal of Personality and Social Psychology (JPSP; Huang, Yeomans, Brooks, Minson, & Gino, 2017), we reported the results of 2 experiments involving “getting acquainted” conversations among strangers and an observational field study of heterosexual speed daters. In all 3 studies, we found that asking more questions in conversation, especially follow-up questions (that indicate responsiveness to a partner), increases interpersonal liking of the question asker. Kluger and Malloy (2019) offer a critique of the analyses in Study 3 of our article. Though their response is a positive signal of engaged interest in our research, they made 3 core mistakes in their analyses that render their critique invalid. First, they tested the wrong variables, leading to conclusions that were erroneous. Second, even if they had analyzed the correct variables, some of their analytical choices were not valid for our speed-dating dataset, casting doubt on their conclusions. Third, they misrepresented our original findings, ignoring results in all 3 of our studies that disprove some of their central criticisms. In summary, the conclusions that Kluger and Malloy (2019) drew about Huang et al. (2017)’s findings are incorrect. The original results are reliable and robust: Asking more questions, especially follow-up questions, increases interpersonal liking. (PsycINFO Database Record (c) 2019 APA, all rights reserved)

Case | HBS Case Collection | November 2019

Starbucks: Reaffirming Commitment to the Third Place Ideal

Francesca Gino, Katherine B. Coffman and Jeff Huizinga

On April 12, 2018, two African American entrepreneurs had scheduled a business meeting at a Starbucks in Philadelphia’s Rittenhouse Square neighborhood. They sat without ordering, waiting for a local businessman to show up for the meeting. The store manager called 911 on them, despite the fact that they were behaving neither violently nor disruptively. When the police arrived soon after the call, they arrested the young men. The incident was viewed by the Starbucks’ leadership team, including the CEO, as “a disheartening situation” and, in the words of John Kelly, the company’s Senior VP of Public Affairs and Social Impact, “a profound failure to live up to our ideals and a violation of our values.” Starbucks, which employed around 175,000 individuals nationwide and served more than 4 million customers daily in its approximately 8,000 U.S. stores, strived to abide by its mission statement: “…To inspire and nurture the human spirit, one cup, one person, one neighborhood at a time.”
The case describes how the company and its leadership responded to the crisis. To react to the incident, the leadership decided to close down its stores for a day of unconscious bias training, aimed at raising awareness of racial bias and discrimination in particular. The company also started a journey of providing more training and development for the partners, to assure that they lived by the company values on a daily basis, and revised store policy that, the leadership believed, contributed to how the store managers and employees in the Rittenhouse Square store behaved back in April 2018. As the case closes, CEO Steve Johnson reflects on how he could assure that every Starbucks employee not only understood the company mission and values, but truly connected to them emotionally and carry them out daily in their work.

Keywords: Mission and Purpose; Values and Beliefs; Prejudice and Bias; Crisis Management; Employees; Training;

Citation:

Gino, Francesca, Katherine B. Coffman, and Jeff Huizinga. "Starbucks: Reaffirming Commitment to the Third Place Ideal." Harvard Business School Case 920-016, November 2019. View Details

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