Museums and social transactions

I've been reading Predictably Irrational by Dan Ariely, the behavioral economist who is frequently featured on NPR. Ariely studies purchasing decisions. He repeatedly demonstrates that markets are not impartial and that individuals and businesses do not tend to automatically act in their own self-interest. In fact, he shows that people often make decisions that are not only not in their best economic interests they appear downright illogical. For example, he asks: Why do people buy one to get one free when they did not need the first one?  Why do people drive across town to save $5 on a small dollar purchase but not on a large one? Why do people who own a thing value it more than potential buyers? Ariely asserts that seemingly illogical decisions are actually very logical, or predictably irrational, when you examine the basis of human decision making.


Social vs economic transactions
In his book, Ariely describes and defines transactions as either social or economic. Simply, an economic transaction is one in which there is an exchange of money. People recognize these as business transactions and expect that they will be governed by rules, such as when and in what form payment will occur. They are not offended by demand for payment. A social transaction is one in which one party does a favor for another with no expectation of payment, and, in fact, would take offense if payment were proffered. In Ariely's example, you would not offer to pay your mother-in-law for cooking Thanksgiving dinner unless you wanted her never to speak to you again. You can ask your neighbor, the lawyer, to bring in your mail while you are on vacation but you would not ask him to spend the same amount of time drawing up your will. Did a wise elder ever warn you not to lend money to a relative with an expectation of getting it back? If so, he was cautioning you not to mix a social and economic transaction. The context of the request and the relationship sets the tone of the interaction.


Ariely points out that people have very different expectations from these two kinds of transactions. Upon conducting social science experiments, he found that people will work harder when they are performing a social transaction rather than an economic one. They expect that the social transaction will be personally meaningful to the recipient, whether the activity is holding open a door or donating a kidney, and they derive pleasure from helping. Moreover, they expect that they will be repaid in the future by an equivalent social transaction, whether directly or through karma. If I help you move your sofa today, I do not expect that you will move mine tomorrow but rather that I may ask you for an equivalent favor in the future. Social transactions break down when people are called upon too often for too much and they begin to feel taken advantage of. Newspaper advice columnists frequently arbitrate just these scenarios. Ask Amy responds to one writer who describes a difference of opinion as to the type of transaction she had entered into when she agreed to tend bar for mom's anniversary party. Social transactions have at their heart an expectation of thanks while economic transactions are expected to provide value. 


Under the aegis of an economic transaction, parties can demand more accountability from others without being offensive. Ariely cites the example of a bank charging an overdraft fee. People are not offended by a business enforcing a contractual obligation, though they may feel free to dispute it. But they do become offended if they have been led to believe that their banking relationship has a personal as well as professional basis such as when the bank trades on its status as a community supporter. This can be a danger to companies when they use social mediums to build economic relationships. People react much more vehemently to betrayals of social contracts, even those that are merely perceived social contracts, than economic contracts. If you hire your neighbor's brother-in-law to remodel your kitchen, you may interpret his inability to show up when scheduled as a personal affront because your economic transaction is masquerading as a social contract. People are much more likely to excoriate companies through negative word of mouth that they perceive as having failed them socially rather than economically. Poor customer service is more often the result of a failed social interaction rather than economic transaction.


So what can museums learn from Ariely's book? 
Museums are wonderfully interesting institutions that since the beginning have walked a line between social and economic relationships. We ask our visitors to pay admission (at least most of us do) to listen to our curatorial point of view and be persuaded to support our missions. Yet we also present ourselves as community members or "friends" and seek to create personal relationships with individuals such as volunteers, teachers, web site visitors, and members. Museums are constantly switching between economic and social transactions. Viewing the many types of interactions as either social or economic and understanding what each side expects from the transaction provides very interesting insights into common problems and misunderstandings faced by museums. In subsequent postings, I will talk about three issues and how we can better understand them as predictably irrational.

1. If it's important, why was it assigned to a volunteer?
2. Which is more valuable, the admission-based or the free museum?
3. Are we friend friends or Facebook friends?