Discounting

Rather than accepting certain behaviors or events, we like to make explanations for them. If you receive an A+ on an assessment, are you more likely to say it was due to your inherent talent or your hard work? Could it be a mix of both?

When faced with more than one possible explanation for an event or behavior, humans discount, or minimize, the importance of each reason.¹ If one explanation seems plausible, we will disregard the other potential factors as irrelevant. The discounting principle is part of Kelley’s Covariation Model of attribution theory, a model for explaining how humans determine the causes of certain events or behaviors.

Attribution theory: A theory about how people make causal explanations for events or behaviors.

Covariation: As one variable increases in value, the corresponding variable also increases in value. Alternatively, as one variable decreases in value, the corresponding variable also decreases in value.

Discounting principle: If there is a good explanation for an effect, people will disregard other possible factors as irrelevant.

Augmentation principle: If there is a good explanation for a failure, then to explain success, people require an especially strong explanatory factor to compensate for said failure.

Attribution theory developed within social psychology to address questions of social perception and self-perception.¹ In terms of social perception, research deals with questions like whether behavior reflects who we are as a person, or environmental factors. As for self-perception, attribution theory focuses on people’s judgements of themselves, such as their abilities, feelings, or attractiveness.

Harold Kelley has made several significant contributions to attribution theory in the 1960s and 1970s, starting with his Covariation Model.¹ Kelley’s 1967 Covariation Model was developed to judge whether a specific action should be attributed to characteristics of the person (a dispositional attribution) or to characteristics of their environment (a situational attribution). As indicated by its name, the model focuses on the covariation that occurs when an effect is attributed to one of its possible causes.² According to Kelley’s Covariation Model, people make attributions based on past experiences and will look for either:

1. Multiple necessary causes, where both A and B are necessary to produce an effect; or
2. Multiple sufficient causes, where either A or B is sufficient to produce an effect.

Kelley introduced the discounting principle in his 1971 chapter “Attribution in social interaction”.³ He outlined the use of discounting to explain how job candidates present themselves in interviews. When candidates present themselves in an ideal manner, observers suggest that they could either be showing their true personalities or be conforming to contextual demands. However, when candidates present themselves in a less than ideal manner, observers conclude that they are showing their true colors since it does not make sense for them to purposely act that way.

Essentially, discounting is a trade-off between two possible explanations: if one is stronger, the other is discounted.³ In the interview scenario, the trade-off is between dispositional and situational attributions. Kelley specified that the discounting principle applies when there is a good explanation for an effect. On the other hand, the augmentation principle specifies that if there is a good explanation for failure, then an especially strong facilitatory factor is needed to explain success. Unlike attributions to single causes, discounting and augmentation focus on the competition between multiple causal factors: the stronger explanation will win.⁴

To conceptualize Kelley’s work on the discounting versus augmentation principle, imagine two tennis players who paired up for a doubles tournament and won the finals.⁴ Player A won a series of singles tournaments, so they are individually perceived to be a great player. Applying the discounting principle, if Player A’s past performances are sufficient for explaining the pair’s win, then Player B’s contribution will be discounted. However, if Player B and Player C are paired up for the doubles tournament, with Player C being an amateur player, then Player B’s contributions would be augmented.

Since its conception, the discounting principle has been confirmed in many experiments among both adults and children.^7,8 Kelley’s work on discounting has been applied to a variety of fields including judgement and decision making, health perceptions,⁹ and social dynamics.¹⁰ Developmental effects have also been found; as children age, they become more skilled at differentiating whether an effect is due to a single cause or multiple causes.^11,12

Considering Kelley’s distinction between the discounting and augmentation principle, and the corresponding distinction between dispositional and situational attributions, discounting can be linked to locus of control. As a result, the discounting principle has influenced subsequent research on the relationship between the covariation model and locus of control, especially when factoring in self-esteem.¹³ How do these factors influence perceived causes of success and failures of others’ job seeking activities? How can the covariation model and discounting be used to explain the relationship between explanations, attributions, and perceptions?¹⁴

Subsequent work on discounting has found that observers seem to be prone to correspondence bias, which is the tendency to draw inferences about a person’s unique and enduring dispositions from behaviors that could be completely explained by situational factors.¹⁵ While this is the opposite of Kelley’s discounting principle, which warns observers to not attribute an effect to a single cause (such as a dispositional factor) when another explanation (like a situational factor) is plausible, the correspondence bias is more evident in Western cultures. This could be explained by the fact that people in Eastern cultures may be more inclined to discount the influence of one’s disposition on behavior and focus on situational contexts instead.¹⁶

Attributions, discounting, and life satisfaction

In 1983, Norbert Schwarz and Gerald Clore set out to study whether people’s judgments of their life satisfaction could be influenced by their mood at the time of judgement.¹⁷ The researchers asked participants to do a filler sound perception task in a soundproof room, before participants were randomly assigned to write three pages about either a positive or negative event. This task was used as a mood induction, either priming participants to feel positive or negative as a result of their writing.

After the mood induction, participants were asked to rate how satisfied they were with their life overall, on a scale of 1 to 10.¹⁷ Not surprisingly, those who wrote about negative events ranked lower life satisfaction than those who wrote about positive events. Ultimately, the researchers found that asking participants to write vivid and detailed descriptions of either negative or positive life events influenced not only participants’ moods in the moment, but also their judgments of how satisfying their life was.

Now, you might be wondering about the purpose of the filler task in the soundproof room. There was another layer to the study, such that some participants were also warned that being in the soundproof room could make certain people feel tense or depressed.¹⁷ When the room effects were not mentioned, the results of life satisfaction were the same as before. However, when the room effects were mentioned, the writing task which served as a mood manipulation had no effects on people’s ratings of life satisfaction.

When given the chance to attribute a bad mood to a certain cause - regardless of its contribution to participants’ quality of life - the description task was discounted in influencing judgments of overall well-being.¹⁷ In other words, people discounted aspects of their lives as a cause of their bad mood when the soundproof room, another explanatory factor, was emphasized.

Availability heuristic, discounting and misattributions

Nortbert Schwarz, the same researcher from the previous case study, also set out with a team of psychologists to study the availability heuristic and discounting.¹⁸ One of the most known heuristics in the field of judgement and decision making, the availability heuristic is when people estimate the frequency or likelihood of an event based on the ease with which information comes to mind. The easier it is to recall something, the more frequent it seems.

Extending the availability heuristic, the researchers showed that if you give people a reason why thinking about something may be hard, then they will discount the applicability of recall on their judgements.¹⁸ 40 participants were asked to either recall 6 or 12 instances when they behaved assertively. Additionally, there was either no background music playing while participants came up with examples, or there was background music playing for which the researchers apologized, as it could be a bit distracting. After coming up with 6 or 12 examples, participants were then asked to rate how assertive they are.

The researchers found that when there was no background music, then those who recalled 6 examples rated themselves as more assertive than those who had recalled 12 examples.¹⁸ The more examples asked of participants, the more difficult it was to recall so many events, which then influenced participants to question their assertiveness. However, when there was background music playing, there was no difference between recalling 6 or 12 examples on determinants of assertiveness. These results show that when there was a misattribution error and people had an excuse for their difficulties coming up with 12 examples, their poor recall was discounted.

Fundamental attribution error

When making judgements about other people’s behaviors, we tend to emphasize dispositional attributions and de-emphasize situational attributions. No, this isn’t Kelley’s discounting principle - it’s the fundamental attribution error. Social psychology consists of many concepts that relate to and build off one another, as is the case here. Read through this piece to learn more about misattributions and our social blindness.

Hyperbolic discounting

The discounting principle in social psychology can get mixed up with hyperbolic discounting, a concept in behavioral economics. While they are not the same, they both involve choosing one item over another, whether a figurative or literal item. Take a look at this article to learn why we prefer immediate gratification!

1. Kelley, H. H. (1973). The processes of causal attribution. American Psychologist, 28(2), 107-128.
2. Kelley, H. H. (1967). Attribution theory in social psychology. In Nebraska Symposium on Motivation. University of Nebraska Press.
3. Kelley, H. H. (1971). Attribution in social interaction. In Attribution: Perceiving the Causes of Behavior. General Learning Press.
4. Van Overwalle, F. (2006). Discounting and augmentation of dispositional and causal attributions. Psychologica Belgica, 46(3), 211-234.
5. In Memoriam: Harold H. Kelley. (2007, December 15). The University of California. http://www.universityofcalifornia.edu/senate/inmemoriam/HaroldH.Kelley.htm
6. American Psychological Association. (2002). Eminent psychologists of the 20th century. Monitor on Psychology, 33(7), 29.
7. Newman, L. S., & Ruble, D. N. (1992). Do young children use the discounting principle? Journal of Experimental Social Psychology, 28(6), 572-593.
8. Sloman, S. A. (1994). When explanations compete: The role of explanatory coherence on judgements of likelihood. Cognition, 52(1), 1-21.
9. McBride, C. A. (1998). The discounting principle and attitudes toward victims of HIV infection. Journal of Applied Social Psychology, 28(7), 595-608.
10. Yarmey, A. D. (1985). Older and younger adults’ attributions of responsibility toward rape victims and rapists. Canadian Journal of Behavioural Science, 17(4), 327-338.
11. Wells, D., & Shultz, T. R. (1980). Developmental distinctions between behavior and judgement in the operation of the discounting principle. Child Development, 51(4), 1307-1310.
12. Kassin, S. M., & Ellis, S. A. (1988). On the acquisition of the discounting principle: An experimental test of a social-developmental model. Child Development, 59(4), 950-960.
13. Hesketh, B. (1984). Attribution theory and unemployment: Kelley’s covariation model, self-esteem, and locus of control. Journal of Vocational Behavior, 24(1), 94-109.
14. Ployhart, R. E., Ehrhart, K. H., & Hayes, S. C. (2005). Using attributions to understand the effects of explanations on applicant reactions: Are reactions consistent with the covariation principle? Journal of Applied Social Psychology, 35(2), 259-296.
15. Gilbert, D. T., & Malone, P. S. (1995). The correspondence bias. Psychological Bulletin, 117(1), 21-38.
16. Mason, M. F., & Morris, M. W. (2010). Culture, attribution and automaticity: A social cognitive neuroscience view. Social Cognitive and Affective Neuroscience, 5(2-3), 292-306.
17. Schwarz, N., & Clore, G. L. (1983). Mood, misattribution, and judgments of well-being: Informative and directive functions of affective states. Journal of Personality and Social Psychology, 45(3), 513-523.
18. Schwarz, N., Bless, H., Strack, F., Klumpp, G., Rittenauer-Schatka, H., & Simons, A. (1991). Ease of retrieval as information: Another look at the availability heuristic. Journal of Personality and Social Psychology, 61(2), 195-202.