What is your reputation worth?

We are very protective of how others see us. How protective, and why?

Imagine you said something that you never intended to be or sound racist, but that could easily be interpreted to be blatantly so. You discover someone is willing to share that information within your community: your friends, your family, your colleagues, your neighbours and so on. How would you feel about that? Could you persuade everyone that whatever is being claimed you said was taken out of context, and that you are not in the least racist? Or would you do whatever it took to stop this message getting out in the open? What sacrifice would you make to safeguard your reputation?

Disreputable business

Reputations certainly count for businesses. A famous case from 1990 was the recall of 160 million bottles of Perrier mineral water, after excessive (but by no means harmful) levels of benzene were found in some of the product. The recall and the PR around it cost the company reportedly $250 million. Despite this, Perrier’s market share tumbled from 15% to 9% in the US, and from 49% to 30% in the UK, and five years later, their sales were still only half of what they were at the peak in 1989. Part of the problem was that this episode revealed that Perrier water was not actually naturally sparkling — the CO2 gas was (and is) extracted separately from the source, and added to the water in the bottling plant. ‘Deception’, the consumer thought.

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That’s what our reputation looks like (image: terimakasih0)

Serious about our reputation

How can we tell how important we find our reputation? Businesses can estimate the effect of a dented reputation means on their revenue, but how do you go about it as an individual? This is something Andrew Vonasch, a psychologist at the University of North Carolina at Chapel Hill, and colleagues set out to investigate across several studies.

  • … going through life with a prominent swastika tattoo (without being able to explain why to everyone taking you for a Neo-Nazi), and having your dominant hand amputated, 70% chose to lose their hand
  • …immediate death, and living to be 90, but with a reputation of being a paedophile (that you would be unable to disprove), 53% choose to die at once. (The average age of the participants was 35, so this represented a significant decision).

The worm turns

But the researchers came up with an ingenious experiment that would take them closer to reality. 123 undergraduate students were told the university was running an investigation into implicit racism on the campus. This would involve administering the Implicit Association Test and then disseminating the results to all members of the university, listing the names of the students, with the highest scoring ones first. The participants carried out the IAT, but were given rigged test results: either 31 (“not very racist”) or 97 (“extremely racist”).

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Thank goodness for these worms! (source: authors’ paper)

Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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