Present Value: Robert Frank discusses his new book, Under the Influence: Putting Peer Pressure to Work
By Maria Castex, MBA ’21
Present Value, an independent editorial project produced and hosted by Johnson students, had the pleasure of interviewing Robert H. Frank, the Henrietta Johnson Louis Professor of Management and professor of economics at the Samuel Curtis Johnson Graduate School of Management. Present Value can be streamed on the Present Value website, or you can subscribe through Apple Podcasts, Spotify, or your favorite podcast app by searching for “Present Value Cornell.”
Robert H. Frank returned to Present Value to take a deep dive into his latest book, Under the Influence: Putting Peer Pressure to Work. With considerable implications for understanding human behavior, this episode not only explores the concept of behavioral contagion and the tendency to mimic others’ behavior, but how this phenomenon can be leveraged to inform public policy and address some of society’s largest and most challenging problems.
Social connectedness and the science of behavioral contagion
Beginning his discussion with an idea reminiscent of the popular 1990s game, Six Degrees of Kevin Bacon, Frank explains social connectedness and the claim that any two people, regardless of where they come from, are linked by five or six degrees of separation. Enmeshed in an intricate social fabric, we are much more influenced by what those around us do than we might, perhaps, be willing to admit.
The book’s central argument is that peer environments are themselves a consequence, in the aggregate, of the choices individuals make. That is to say, one individual’s decision to begin smoking will make it likelier that the people surrounding that individual will also become smokers. By and large, as a society, we ignore these effects. But Frank poses the question: How could we leverage this phenomenon by encouraging people to make decisions and behave as if they cared about their effect on those who surround them?
Implications for climate change
The crux of the book is behavioral contagion’s implicit power as a means to better inform our collective response to the threats of climate change. Most of the energy-intensive activities that we undertake (driving big cars, building big houses, destination weddings) are a result of our direct environment; we do those things because the people around us do them, as well. Framing the climate change narrative around behavioral contagion presents a huge opportunity: Any small change in behavior can produce an outcome many times larger than what we might expect.
Taxation as a means to incorporate contagion into public policy
Using the framework of behavioral contagion, individual behaviors can be viewed as “behavioral externalities” and equated to environmental externalities, such as pollution. According to Frank, the optimal way to deal with negative externalities such as polluting, or behavioral externalities such as smoking, is to tax those behaviors in order to make them less attractive.
Using the example of smoking and tobacco taxes, he explains: “If you want to smoke, you can smoke. All we tried to do was put the price of smoking closer to the true cost of smoking, which includes the effects on other people.” This type of tax scheme, known as a Pigovian tax, preserves an individual’s liberties while disincentivizing the negative behavior.
For more, check out the full-length Present Value podcast, Putting Peer Pressure to Work | Robert Frank. Listen, subscribe, and share!
About Robert H. Frank
Robert H. Frank is the Henrietta Johnson Louis Professor of Management and professor of economics at the Samuel Curtis Johnson Graduate School of Management and a distinguished senior fellow at Demos. For more than a decade, his “Economic View” column appeared monthly in The New York Times. His books include The Winner Take All Society, The Economic Naturalist, and Success and Luck. Frank is a co-recipient of the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought. He was awarded the Johnson School’s Stephen Russell Distinguished teaching award in 2004, 2010, and 2012, and its Apple Distinguished Teaching Award in 2005.