Choosing the Right Pond: Human Behavior and the Quest for Status

by Robert H. Frank

Is it better to be a big frog in a small pond or a small frog in a big pond? Here, economist Robert H. Frank argues that concerns about status permeate and profoundly alter a broad range of human behavior. He shows how status considerations affect the salaries people earn, the way they spend them, and even many of the laws, regulations, and cultural norms they adopt. Provocative and insightful, this book is sure to spark widespread and lively debate in classrooms and boardrooms alike.

Genres: Economics, Psychology, Nonfiction, Philosophy, Sociology

299 pages, Paperback

First published May 23, 1985

About the author

Robert H. Frank is the Henrietta Johnson Louis Professor of Management and a Professor of Economics at Cornell University's S.C. Johnson Graduate School of Management. He contributes to the "Economic View" column, which appears every fifth Sunday in The New York Times.

Reviews

[Paolo Santini · Rating 4 out of 5]

Very interesting and provocative book. Despite the originality and strength of the proposed argument, sometimes it feels that its implications are pushed a little too far.

[Matthias · Rating 4 out of 5]

A classic of behavioral economics, originally published in 1985 but still provoking and insightful decades later.
It analyzes some seemingly economically "irrational" social choices to show how they can actually be explained rationally when one takes into consideration the inner human concerns for relative social standing.
It then advances some proposals (mainly a corrected version of Friedman's negative income tax, and a consumption tax on positional goods rather than on income) which would work better at increasing equality while at the same time preserving markets freedom and the power of economies of scale, since they take more into consideration these facts about human behavior when compared to the current most common policies - in short, giving us a more efficient system.
Thorstein Veblen and his considerations on conspicuous consumption are the declared starting point, but Frank expands quite a bit from there, and touches on political and moral philosophy as well.
One of the best aspects of Frank's books, and it can already be found here, is the fresh air of intellectual independence, as he critiques the ideas of many different groups (traditional economists, Austrians/libertarians, leftists, policymakers, etc.) on specific, well-defined points, while highlighting their being correct on others, and providing a framework that puts all such observations together coherently.

[Stan Parker · Rating 4 out of 5]

Mostly skimmed the book. Interesting hypothesis that people look for situations where they feel comfortable at the local level, and this can have profound effects on how much people are paid at different companies.

[Kate Hall · Rating 4 out of 5]

Interesting and New and Challenging Information.

"People come into the world equipped with an inner voice urging them to rank as high as possible in whatever social hierarchy they belong to."

"The process of determining what works best does NOT and can NOT take place in social isolation"

"Pre-commitment in Bargaining – negotiating parties do better if they commit themselves in advance to a particular negotiating position"

"Happiness levels are NOT very sensitive to comparisons across time"

[Anurag · Rating 5 out of 5]

An absolutely phenomenal book by an academic who refuses to see economics without its forays into behavioural psychology. Frank feels the need to come to terms with our deeply ingrained, probably evolutionary, tendencies of mutual competition at local levels. Taking data from academic job market and salaries of union members and surveying opinions from Mill to Marx, Frank criticises both left-wing and right-wing economists for misguided judgements about policy.

[Lily]

Note to self: was recommended by Will.