What's fair compensation for executives?

(This doesn't tie in 100% with the theme of this blog but is fascinating so I'm posting it anyway.)

A chemical engineering professor has developed a new maths theory for calculating fair pay packages for executives:

"The proposed theory allows us to compute what the fair pay is for a CEO, including bonuses and stock options, under ideal conditions…

Using the new analysis method, Venkatasubramanian estimated that the 2008 salaries of the top 35 CEOs in the United States were about 129 times their ideal fair salaries. CEOs in the Standard & Poor's 500 averaged about 50 times their fair pay, raising questions about the efficiency of the free market to properly determine fair CEO pay, he said…

…the same concepts and mathematics used to solve problems in statistical thermodynamics and information theory also can be applied to economic issues, such as the determination of fair CEO salaries…

…Warren Buffett, CEO of Berkshire Hathaway and an outspoken critic of executive pay excesses, drew an annual salary of $200,000 in 2008," Venkatasubramanian said. "This makes his pay ratio 8-to-1, assuming a minimum employee salary of $25,000 per year, which fits the ideal benchmark estimate for fair CEO pay almost exactly. Mr. Buffett's instincts about fairness seem to be amazingly accurate…"

I'll leave it to the mathematicians, statisticians and economists to read the full paper "What is Fair Pay for Executives? An Information Theoretic Analysis of Wage Distributions" and the economic interpretation of the concept of entropy!

Via Purdue University news release 3 November 2009

First impressions do count

Why do first impressions about your personality based on the way you look count?

Maybe because, as a study has found, people can actually work out some key personality traits quite accurately (extraversion, self-esteem) based on appearance alone, especially when you're being naturally expressive (in which case other traits can be accurately judged too - agreeableness, conscientiousness, emotional stability, openness, likability, loneliness, religiosity and even political orientation).

The authors suggest you can influence people's impressions of you by how you look and behave - which, of course, is nothing new.

Extracts:

"First impressions do matter when it comes to communicating personality through appearance, according to new research by psychologists Laura Naumann of Sonoma State University and Sam Gosling of The University of Texas at Austin…

…until now little research has examined the accuracy of personality impressions based on appearance alone. These findings will be published in the December 2009 issue of Personality and Social Psychology Bulletin, co-written with Simine Vazire (Washington University in St. Louis) and Peter J. Rentfrow (University of Cambridge)…

…Even when viewing the targets in the controlled pose [with neutral facial expression], the observers could accurately judge some major personality traits, including extraversion and self-esteem. But most traits were hard to detect under these conditions. When observers saw naturally expressive behavior (such as a smiling expression or energetic stance), their judgments were accurate for nine of the 10 personality traits. The 10 traits were extraversion, agreeableness, conscientiousness, emotional stability, openness, likability, self-esteem, loneliness, religiosity and political orientation.

"We have long known that people jump to conclusions about others on the basis of very little information," says Gosling, "but what's striking about these findings is how many of the impressions have a kernel of truth to them, even on the basis of something as simple a single photograph."..

whether you smile and how you stand (tense vs. relaxed, energetic vs. tired) are important cues to judge a variety of traits. Extraverts smile more, stand in energetic and less tense ways, and look healthy, neat and stylish. People who are more open to experience are less likely to have a healthy, neat appearance, but are more likely to have a distinctive style of dress.

The researchers also found males who have a neat and healthy appearance are often seen as more conscientious. However, defining personality in women was more difficult because they were more strongly influenced by cultural demands to look presentable."

From PhysOrg 3 Nov 2009

UPDATE: for a limited time there's a full copy of the 1 Dec 2009 version of this article available online.

Facial preferences of straight / gay men & women differ

A Harvard University-supported research project indicates that what attracts males sexually differs from what attracts females, whatever their sexual orientation.

Based on an online study (the first to investigate facial feature preferences of gay men and lesbians), where more than 900 men and women took part:

• Gay men are most attracted to the most masculine-faced men.
• Types of male faces that gay men found attractive generally did not match types of faces straight women found attractive.
• Gay men and straight men did not agree on the types of male faces they considered attractive.
• Straight men prefer the most feminine-faced women.
• Women’s preferences are more complex than men’s.
• In this study straight women preferred more masculine-faced men than lesbians did.
• Lesbians preferred slightly more masculine female faces than straight women or men did.

The news item also said:

"Prior research has also shown that women prefer more masculine male faces when ovulating, indicating an evolutionary function for facial attraction. Men who have faces that are higher in sexual dimorphism (masculinity) have been shown to have better health and dominance but lower investment in offspring."

The study was led by Aaron Glassenberg with co-authors David Feinberg of McMaster University, Benedict Jones and Lisa DeBruine of University of Aberdeen, and Anthony Little of University of Stirling.

Their article, in the journal Archives of Sexual Behavior: Sex-Dimorphic Face Shape Preference in Heterosexual and Homosexual Men and Women

Reading faces: facial expressions, culture and the "inscrutable" - and smileys :) ^.^

Your ability to recognise other people's facial expressions accurately can depend on your culture (hence, in my view anyway, Western stereotypes about "inscrutable" Orientals). This is even reflected in differences in emoticons, see below.

Because East Asians mainly look at eyes rather than mouth or the whole face, they find it harder to differentiate between emotions where the eyes look the same - fear vs. surprise, disgust vs. anger. Cultural Confusions Show that Facial Expressions Are Not Universal, Rachael E. Jack,Caroline Blais, Christoph Scheepers, Philippe G. Schyns and Roberto Caldara, 2009 - summary, press release. This research was also picked up e.g. in a New Scientist article Human facial expressions aren't universal.

"The cultural specificity in eye movements that they show is probably a reflection of cultural specificity in facial expressions, Jack said. Their data suggest that while Westerners use the whole face to convey emotion, Easterners use the eyes more and mouth less."

In other words, in Eastern societies it's less acceptable to show emotion.

I suspect that, conversely, Westerners find it harder to recognise emotions in Easterners, which are conveyed mainly through the eyes, and therefore (wrongly) think that Easterners are emotionless. I believe all this ties in with cultural stereotypes about "inscrutable" Orientals.

Differences between Eastern and Western smileys

Even more interestingly, their survey of Eastern versus Western emoticons (smileys or smilies) supported the eyes vs mouth differentiation:

"..there are clear cultural differences in the formations of these icons… Western emoticons primarily use the mouth to convey emotional states, e.g. : ) for happy and : ( for sad, she noted, whereas Eastern emoticons use the eyes, e.g. ^.^ for happy and ;_; for sad."

"In sum," the researchers wrote, "our data demonstrate genuine perceptual differences between Western Caucasian and East Asian observers and show that FACS-coded facial expressions are not universal signals of human emotion."

Learning - success, failure, & the bigger the carrot..

Researchers Earl K. Miller, Mark Histed and Anitha Pasupathy from MIT's Picower Institute for Learning and Memory have shown (press release 29 July 2009) that, at least in monkeys:

"Brain cells may only learn from experience when we do something right and not when we fail."

Maybe that's why people tend to repeat the same mistakes over and over again, and never learn from their mistakes. (The title of their article isn't given in the news release - see that for more info.)

And separately, on the carrot and stick front, while it's known that being rewarded for something makes you learn it faster (aka effect on "higher cognitive processes"), it's been found that the "reward effect" can be strengthened by adding dopaminergic compounds to boost the "teaching signal".

While targeted use of such compounds might help patients e.g. re-learn things after a stroke, they warned that use should be with care - higher brain dopamine level is said to be the cause of [associated with?] mental illnesses like schizophrenia.

That study also showed that the bigger the reward on offer, the faster people learned to make the correct decision i.e. the reward effect also influences "somatosensory processes" - the carrot effect turns out to be stronger the higher the reward.

Pleger B, Ruff CC, Blankenburg F, Klöppel S, Driver J, et al. (2009) Influence of Dopaminergically Mediated Reward on Somatosensory Decision-Making. Press release 27 July 2009.

Happiness

Most of us would like to be happy, or happier.

An interesting experiment reported by the Guardian conducted by psychologist Richard Wiseman (University of Hertfordshire) showed that people asked to practise 1 of 4 techniques:

• expressing gratitude
• smiling
• recalling a pleasant event from the day before and
• carrying out an act of kindness

reported feeling happier, with those asked to think about one positive thing that happened the day before reporting the greatest increase in happiness (15% compared with the control group).

The video above is on the memories technique. For more videos on the technique and more info generally, see the related Science of Happiness site. No doubt Prof Wiseman will be feeling very happy if lots of people buy his book 59 Seconds: Think a Little, Change a Lot as a result of all the publicity! Or, we could all just focus on happy memories…

Sexuality / sexual orientation: therapy won't "fix" it

The American Psychological Association Task Force on Appropriate Therapeutic Responses to Sexual Orientation recently (August 2009) finished a review which concluded that trying to change sexual orientation isn't likely to work and may involve some risk of harm -  despite the claims of sexual orientation change efforts (SOCE) practitioners that therapy can "cure" homosexuality.

From the APA's summary:

"Even though the research and clinical literature demonstrate that same-sex sexual and romantic attractions, feelings, and behaviors are normal and positive variations of human sexuality, regardless of sexual orientation identity, the task force concluded that the population that undergoes SOCE tends to have strongly conservative religious views that lead them to seek to change their sexual orientation.

Thus, the appropriate application of affirmative therapeutic interventions for those who seek SOCE involves therapist acceptance, support, and understanding of clients and the facilitation of clients’ active coping, social support, and identity exploration and development, without imposing a specific sexual orientation identity outcome."

See also:

• Executive summary
• Report of the American Psychological Association Task Force on Appropriate Therapeutic Responses to Sexual Orientation

Via LA Times.

Men who do the housework get the gals

From Oxford University press release 4 August 2009:

"if you want to settle down, your chances of getting married or living with someone are probably highest in Great Britain, the Scandinavian countries and the United States.

…men in those countries are more likely than their Australian counterparts to do the household chores and thereby make marriage a more attractive option to their nation’s women.

…marriage and cohabiting rates in developed countries can be linked to attitudes towards the roles of men and women, and views on who is responsible for doing the housework and looking after the children.

Both men and women have shown they are more likely to want a live-in relationship with the opposite sex if they think their partner will do a share of the housework and childcare duties."

Egalitarian index of countries

The economist concerned even developed an ‘egalitarian index’ of 12 developed countries from questionnaires on gender, housework and childcare responsibilities. It's interesting to see cultural differences reflected.

Top 4, in that order: Norway, Sweden, Great Britain, the United States.

Bottom 4: Japan, Germany, Austria, Australia.

Why women don't marry or move in

Also interesting:

"The study also suggests that a more egalitarian woman in any country is less likely than a less egalitarian woman to set up home with a man because, everything else being equal, most men would choose a woman who they can rely on to do housework and look after the children. While egalitarian men seem to be viewed as a better bet by women, egalitarian women are seen as a less safe bet by men…

If developed countries want to look at why the birth rate in their country is falling, we need to focus on the drivers for whether couples decide to live together and start a family. It seems to show what couples ask "Will I be better off?". Women in less egalitarian countries are saying "No"."

Household Division of Labor and Cross-Country Differences in Household Formation Rates, 2009. Dr Almudena Sevilla-Sanz.

Get rich, retire early!

From the department of the somewhat obvious - a study on financial windfalls and retirement showed that:

"Older workers who get a jolt of cash out of the blue are more likely to cash in on early retirement…

unexpected inheritances hasten retirement, lending new credence to a widely held economic theory that people value leisure time and will parlay newfound wealth into less work…

The study found that nearly a quarter of workers who received a surprise or bigger-than-expected inheritance retired early, compared with 18 percent of total workers surveyed in the ongoing Health and Retirement Survey. The odds increased significantly as windfalls grew.."

I'd say that would apply to any workers, not just older ones!

Also:

"A negative shock to wealth has just the opposite effect of what we have in this study, so I expect that those [recent stock market] losses are going to lead some people to work longer than they expected."

Annoyingly they've not named the study but it was by Jeffrey R. Brown (pictured) and Scott Weisbenner from the University of Illinois.

For more info see the U of Illinois press release 13 August 2009.

Casual sex, one night stands: men vs women, Germans vs Americans

Yes, people actually research things like "How willing are you to accept sexual requests from slightly unattractive to exceptionally attractive imagined requestors?" Dr Achim Schützwohl et al, Brunel University (2009).

From the press release 11 August 2009:

Only the best looking men tempt women into casual sex

Men are far more interested in casual sex than women. While men need to be exceptionally attractive to tempt women to consider casual sex, men are far less choosy…

…men are more likely than women to report having had casual sex and they express a greater desire for it than do women. It is also thought that women but not men raise their standards of attractiveness for a casual sex partner.

As well as gender differences there were differences by culture / nationality / country:

The requestor's looks affected men and women differently. Across all three levels of requestor attractiveness, men were more likely to go out, go to their apartment and go to bed with them than were women. German men were less likely to go out with the requestor and go to their apartment than American and Italian men. Italian men were more likely to go to bed with the requestor than were American men. German men were even less likely than American men to go to bed with the requestor. These differences highlight cultural differences in sexual morals and preferences…

While men are not entirely insensitive to their requestor's attractiveness, women have higher standards and are more likely to engage in casual sex with an exceptionally attractive man than with a less attractive man.

So basically women interested in one night stands are more likely to get lucky than men are, especially less good looking men.

Errr, didn't we already know that?!

The smell of fear (sweat) - and anxiety

Women who've smelled sweat from frightened men are more likely to interpret facial expressions as fearful (as in, I think, "threatening" rather than "frightened") - but only when the expression is ambiguous / neutral.

"Our findings provide direct behavioral evidence that human sweat contains emotional meanings," Chen said. "They also demonstrate that social smells modulate vision in an emotion-specific way." (From the press release 6 March 2009).

From their paper Fear-related chemosignal modulates fear recognition in ambiguous facial expressions - by Wen Zhou, Denise Chen, Department of Psychology MS-25, Rice University:

"We show in two experiments that the chemosignal of fearful sweat biases women toward interpreting ambiguous expressions as more fearful, but has no effect when the facial emotions are more discernable. Our findings provide direct behavioral evidence that social chemosignals can communicate emotions and demonstrate that fear-related chemosignals modulate visual emotional perception in an emotion-specific way -- an effect of olfaction in humans that has been hitherto unsuspected."

New Scientist also recently reported different experiments by Lilianne Mujica-Parodi, a cognitive neuroscientist at Stony Brook University in New York and colleagues, showing that when "stress sweat" was inhaled by two separate sets of volunteers, their amygdala was activated. That's the "primitive" part of the brain which deals with fear, anxiety and other emotions. Perspiration created in unstressed conditions didn't however produce the same result. (Second-Hand Stress: Neurobiological Evidence for a Human Alarm Pheromone)

Another New Scientist article, on yet more sweaty studies by Bettina Pause and colleague  at the University of Dusseldorf, Germany, said that sweat from students 1 hour before their final exams "had a different effect on brain activity [compared with sweat from exercising], lighting up areas that process social and emotional signals, as well as several areas thought to be involved in empathy", in volunteers who sniffed it. "This may allow fear to spread quickly and speed our ability to flee danger."

Your posture can affect your productivity

Another pointer to a post on my main blog: your posture may affect productivity depending on your mood.