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Ayelet Gneezy

Ayelet Gneezy

Researching What Really Matters

Dr. Ayelet Gneezy, Professor of Behavioral Sciences and Marketing at the Rady School of Management at UC San Diego, has built her academic career around researching deceptively simple social behavior and phenomena—then challenging us on how we view them. As an endowed-chair holder at the Rady School, Gneezy, who hails from Israel, couldn’t feel prouder that her chair-holder title includes the words: “social innovation” and “impact.”  

Might wanting to do the right thing or thriftiness impact our decision to donate—or not donate—to a charitable cause? Is working harder really worth it? Is working harder really worth it? And do smartphones drain our cognitive ability—just by being there?

Questions like these intrigue Dr. Ayelet Gneezy who became this spring the Carol Lazier and Family Endowed Chair in Social Innovation and Impact at the Rady School of Management at UC San Diego.

The endowment fits. For a researcher who’s hung her hat on challenging how we view ourselves—and others—and on what motivates our behavior, no better endowed-chair title exists. Nor can Gneezy herself think of a better title than one deriving from Carol Lazier, whose $1 million endowment helped establish in 2014 the Center for Social Innovation and Impact (CSII) at the Rady School of Management.  “Being endowed by Carol Lazier is meaningful to me,” Gneezy says. “She’s extremely inspiring; she’s fierce; and yet, her fierceness comes with softness and kindness. She’s a go-getter.” 

A Researcher with Societal Impact

Gneezy is also a go-getter, a well-loved professor—and her research on social behavior consistently makes national headlines, because it’s interesting and impactful. Publications like the Financial Times of London in 2020 recognized her research on the adverse impact of smartphones on our cognitive capacity as having the “best social research impact.”

One of her most well-known research contributions became the pay-what-you-want behavioral pricing model which garnered much interest from academics and practitioners.  A well-cited 2010 publication in Science, “Shared Social Responsibility: A Field Experiment in Pay-What-You-Want Pricing and Charitable Giving” was also awarded the 2011 Robert B. Cialdini Award for outstanding contribution in field research in social psychology.

This large-scale field experiment, Gneezy and colleagues conducted at a well-known amusement park, tested the effectiveness of the pay-what-you-want model by selling park visitors roller coaster photos. The data Gneezy and her colleagues collected in this study offer novel lessons on how and why we spend. While more people bought the photo under the PWYW model, most paid little— less than a dollar. When vendors coupled PWYW with a charitable cause, meaning vendors told buyers they could pay what they want and half would go towards helping support patients, customers paid much more—as much as $6.50—which generated income and a charitable gift.

Gneezy’s takeaway from this research was this: Switching from corporate social responsibility to shared responsibility works in part because payments are now more than just a transaction involving the exchange of goods. The amount a consumer pays also serves as a signal of their generosity, and social welfare concerns.

In a follow-up experiment in 2012, Gneezy and fellow researchers explored the ‘why’ by investigating how individuals consider their identity and self-image under “pay-what-you-want” pricing.  The researchers tested PWYW pricing via three experiments. Some boat tour riders could pay $15 for a photo of themselves, others $5 and others PWYW. Around 64% of customers bought photos at $5 than those naming their own price.

Results from these field experiments showed that often, consumers are less likely to purchase a product when they get to decide how much to pay, than when the price is fixed and low. Gneezy and her colleagues concluded that self-signaling concerns – paying less than the “appropriate” price (which is often unknown in real-time), meaning they are cheap or unkind – causes individuals to pass on purchasing the product altogether.

Gneezy compared the excitement she and her fellow researchers felt on the day of the amusement park experiment to a pregnancy—waiting for the baby to come. “You’ve spent so many hours—sometimes years—waiting for the approvals to come in to conduct the live experiment; and then, you have the thrill of seeing the up-close and live-time results.”

The differing conditions for the PWYW pricing experiments also felt thrilling. For instance, on the second day of the amusement park experiment when half of purchases went to charity, the line was half as long and so quiet. “You could literally hear the wheels turning and people trying to decide what a fair price would be. It wasn’t the same excitement we saw on the first day when it was PWYW conditions only. On that day, it really felt like a market with lots of commotion. On the second day, you could feel the weight on people’s shoulders.”

These moments reconfirm for Gneezy her love for research. “If you're a researcher and you're not excited about the data and the results of the data, then you're in the wrong industry,” she says with a glow. “And the excitement from field experimentation is 10 X.”

 A Non-Academic Trajectory

In spite of passion for her research, academia was not always on Gneezy’s radar. Early on she enjoyed practicing marketing, and believes she would have continued down that path had she not met, and fallen in love, with Dr. Uri Gneezy, Professor of Economics and Strategy, at the Rady School of Management. Prior to the Rady School, Uri Gneezy taught at the Booth School of Business at the University of Chicago where Ayelet Gneezy did her PhD.

“It was my husband’s belief in me—his encouragement and validation of my big ideas—which encouraged me to pursue my master’s, PhD, and the life of a researcher.” She adds much joy exists in him being a researcher, too. “He’s my best friend, and we enjoy discussing and brainstorming research ideas very much.”

She says little from her girlhood in Israel put her on this path either. She grew up in a comfortable home with no real hardship. Hearing of her mother and aunt’s experiences hiding and fleeing from harm during the Second World War as Bulgarian Jewish teenagers, a star stamped on their clothing, made her feel compassion for others. Perhaps her mandatory military service made an impact by exposing her to soldiers from less fortunate backgrounds than her own; but she thinks that’s a stretch.

She finds now it’s the research itself—and its impact—which stimulates the next. She is drawn to projects that focus on issues that matter to individuals and, relatedly, to our society. She enjoys researching pro-social behavior and the impact of agency on time and risk preferences.

Along with the earlier mentioned Financial Times accolades, leading news outlets including The Washington Post, Time, Huffington Post along with business news media like Freakonomics liberally feature her research.

This highly-shared work on smartphones came from exploring through two experiments in 2017 the impact Smartphones have on our available cognitive capacity—even when close to us, but not in our hands. Gneezy and fellow researchers discovered while these devices can improve our welfare, cognitive cost indeed exists. We undercut how we perform, even when successfully avoiding checking our phones: Their mere presence gets in our way, and especially those with high dependence on smartphones. Gneezy admits this research became popular in ways she had not anticipated, even with coverage from the Wall Street Journal.

Making Research Accessible and Conceptual

Asked why her research draws so much attention, Gneezy suspects it ties to the topics themselves feeling relatable and accessible to others vs. technical or conceptual. “My research is very tangible, and I think people can just relate to that because they learn something about themselves and those they spend time with through my work,” she says. “I’m interested in questions or in phenomena that almost anyone—and everyone—can relate to.”

Most of her meaningful research came from her own experiences and noticing human experiences—often from those close to her and in essential times in their lives.

A few years ago, Gneezy had a family member shift from an uncomfortable stay at a public hospital with awful food and bed linens made paper thin from over washing to a private hospital with much nicer everything but at a much higher price.

This experience inspired a lovely research paper published in the Journal of Market Research on how we often equate higher prices to higher quality. The research focused on a field experiment within a winery, where Gneezy and co-authors discussed implications for pricing and profitability. And yet, higher prices also set higher expectations and when price is high and quality low, the product falls short of consumers’ expectations, the price-quality, known as “P-Q” relationship is reversed.

Partnering with a Socially Innovative University

Working at the Rady School of Management has brought Gneezy’s research to a new level, she says. “Any time we shared new ideas, new directions—we gained a ‘yes’ which fosters a sense of innovation and big-ness you don’t always find within academia,” she says of the culture at Rady.

Her passion for field research has also felt supported there. Previously, she’s organized two conferences on field experimentation at the Rady School with the goal of encouraging more behavioral researchers to use field experimentation. The second resulted with a special issue at the Journal of Marketing Research.

Gneezy has founded two centers: The Center for U.S. -Israel on Innovation and Economic Sustainability at the Rady School of Management and the Center for Social Innovation and Impact (CSII), launched in 2014-15, with the Carol Lazier gift. And she’s created rich cultural and business learning environments for students through the Israel Immersion program and the reciprocal San Diego immersion program. 

Even throughout Covid-19, the San Diego immersion, under Gneezy’s leadership, conducted a U.S.-Israel case competition. Rady School and Israeli graduate students proposed a go-to-market strategy for a real Israeli startup wanting to enter the U.S. market. Clients Hilma in 2020 and Sightbit in 2021 felt impressed with the quality of the work students submitted, she says.

She describes herself using a “firm” systemic approach with her students when thinking about social impact or social issues. “When seeking change, you must understand what’s going on? Why is this problem happening? Who contributes to the problem? Who might help mitigate or address the problem? There’s a lot of work to do before you get to the solution.” Her students inspire her too with their perseverance, their quest for learning and applying that learning to help make society better.

 Making Society Better

With social distancing, a challenge for behavioral scientists, still prevailing during this interview, Gneezy feels interested in exploring several social phenomena through current and future research. She wonders: What nuanced reasoning encourages or prevents us from wearing masks and from socially distancing? How do people perceive and treat the elderly, those with mental health issues or people coping with addiction? And she wonders about “prosocial behavior,” not tolerance per se; more so, how can we become the best possible version of ourselves?

This last big idea stems from Gneezy’s belief that we are not as good as we should be—neither within society nor as individuals. “Maybe we're much better than we used to be; but evil is still there. And we still look the other way when bad things happen.” She wonders what types of changes and interventions, even if small, could shift our mindset and behaviors and help create a better society. “I hope my research shines light on our thought processes and with that becomes instrumental for society. Hopefully I’m doing that.”