Dynamic Homeostasis: Behavioral Research and the Ftc

David M. Gardner, University of Illinois
[ to cite ]:
David M. Gardner (1974) ,"Dynamic Homeostasis: Behavioral Research and the Ftc", in NA - Advances in Consumer Research Volume 01, eds. Scott Ward and Peter Wright, Ann Abor, MI : Association for Consumer Research, Pages: 108-113.

Advances in Consumer Research Volume 1, 1974    Pages 108-113

DYNAMIC HOMEOSTASIS: BEHAVIORAL RESEARCH AND THE FTC

David M. Gardner, University of Illinois

The title of this paper appears at first glance to be an obvious contradiction. When we refer to dynamic we focus on change and in reference to homeostasis we focus on relatively stable conditions or "steady state". To the consumer, the FTC could readily be characterized as dynamic. And many in the business community would even suggest the FTC is- too dynamic. On the other hand, some feel that while there has been change at the FTC represented by reorganization and renewed activity, especially directed at advertising and consumer problems, it is still essentially a ponderous organization characterized by a steady state.

The latter view is frequently voiced by social scientists as they bemoan the seeming reluctance or unwillingness of the FTC to use the talents, techniques and research of behavioral scientists. This paper is directed to exploring this seeming contradiction and is focused entirely on the contradiction as it applies to the use of behavioral research by the FTC.

This seeming contradiction most likely is the result of individuals, well meaning as they may be, viewing the FTC out of context. By focusing on a specific action of the FTC or a specific reluctance, is to ignore the role of the FTC as envisaged by Congress and to further ignore that any organization is a behavioral entity that cannot easily change.

On the other hand, to view the FTC as an open system that both responds to and tries to influence its environment while protecting itself gives perspective to this seeming contradiction. It is not the intent of this paper to apply open systems theory in its entirety to an analysis of the FTC. While that is an interesting project, the specific intention is to only look at one characteristic of an open system, i.e., dynamic homeostasis, and how that characteristic can be used to describe the present use of behavioral science, its future use and pitfalls.

Any system strives to protect itself from change. Individuals do not like change, especially imposed change; and likewise, organizations do not like change. Change may be desirable but organizational change in particular is often not enjoyable because of threats, both real and imagined, to the individual or organization.

Change can be placed on a continuum from change associated with relatively minor ways of thinking or doing things at one extreme to disruptive or completely different directions or methods at the other extreme. All open systems are constantly undergoing minor change, but the character of the system remains the same (Katz and Kahn, 1966).

In the face of change necessitated by demands of the environment the individuals and/or the organization "will attempt to cope with external forces by ingesting them or acquiring control over them (Katz and Kahn, 1966,p.24)" This process of dealing with external forces almost always results in qualitative change in the organization and generally quantitative change. Qualitative change occurs as supportive systems of a specialized nature are formed and often as the system becomes larger and more complex. This process is described by Katz and Kahn in the following way:

"Living systems exhibit a growth or expansion dynamic in which they maximize their basic character. They react to change or they anticipate change through growth which assimilates the new energetic inputs to the nature of their structure. In terms of Lewin's quasi-stationary equilibrium the ups and downs of the adjustive process do not always result in a return to the old level..Under certain circumstances a solidification or freezing occurs during one of the adjustive cycles. A new baseline level is thus established and successive movements fluctuate around this plateau which may be either above or below the previous plateau of operation (Katz and Kahn, 1966, p. 25)."

Present FTC Posture on Behavioral Research

It is now clear that an organization can be described accurately as being in a steady state and being dynamic at the same time. In fact this is the normal state of a healthy open system. To analyze the present posture of the FTC on behavioral research, several factors that support the steady state need to be reviewed

1) Courts for many years have applied the Hearsay Rule -- the general rule that out-of-court statements are not acceptable in court because they cannot be subjected to cross-examination--to the general admissability of research evidence, especially survey evidence. While there is some indication that changes are taking place in the application of the Hearsay Rule to the admissability of research, it is quite clear that many attorneys are understandably reluctant to submit evidence that may be thrown out of court. Even if research evidence were to be submitted, it is doubtful an attorney would desire to base his case on that research because of the possibility of it being thrown out.

2) The FTC, being a regulatory body, is largely staffed by lawyers. And of course, the Administrative Law Judges who hear the cases brought by the FTC and members of higher courts are also attorneys. With a few notable exceptions, there is little in the background or training of most attorneys that would suggest they would understand the behavioral sciences or research processes. Therefore the attorney is unlikely to have any perspective on human behavior other than what would be expected by the educated layman. Likewise, his understanding of research is often limited to his knowledge of political polling and he has insufficient background to understand, let alone evaluate inferential research. It is therefore reasonable to expect that attorneys who do not understand behavioral research will not use it. Similarly, judges will most likely subjectively reduce the importance of behavioral research evidence and most likely be unable to give sophisticated judgments of its importance or quality.

3) In general, the legal process in the United States is designed to seek justice, not truth. Most certainly, truth is a byproduct of the legal process. The adversary nature of the U.S. legal process is both a reflection and a cause. Therefore it is not unusual for information that may be useful in discovering truth to be omitted from a specific legal proceeding because one party may feel that its admittance would interfere with justice. Such is often the case with behavioral research. Since all behavioral research is based on a sample of the universe and conducted in ways which are always susceptible to error variance, it can and will be attacked in adversary proceedings of our legal system. Doubt can easily be cast on all inferential research and the potential consequence to the attorney is that this doubt may negatively influence his case. Therefore, evidence which would normally be accepted by a behavioral scientist as reasonable evidence of the existence of a given belief or phenomena is avoided by attorneys in the preparation of a case.

4) Behavioral research has recognized uses in the planning function of an organization like FTC. However attorneys whose training focuses on solving or remedying abuses of the law wherever they exist are reluctant to engage in any type planning which might circumscribe their freedom to challenge injustice. Therefore research that might result in an ordering of priorities is ignored or subverted. The distinction between research results and managerial implementation of these results is not something readily understood by non-managerially trained attorneys. Therefore, research that could give guidance to decision making is not carried out, because policy makers feel such research would limit their freedom in planning.

Reviewing these four factors, it is readily apparent why the FTC can be described as being in a steady state with regard to the use of behavioral research. There is no mass conspiracy to avoid the use of research. In fact, the FTC has no statement specifically relating to the use of, or desire for using or not using behavioral research. The issue, rather, is that the use of behavioral research in both litigation and planning represents a threat to both individuals and organization.

Future FTC Posture on Behavioral Research

Will the rather bleak picture outlined above continue to prevail, or can we expect changes in the use of behavioral research at the FTC? There are two reasons we can expect a change in the direction of using behavioral research. First is the expectation developed by reference to open systems theory and the characteristic of dynamic homeostasis. Second are the few timid steps currently being taken.

As pointed out previously, organizations facing demands for change either try to ingest the external forces or acquire control over them. Since the FTC is an open system responsible to Congress, it is unlikely that the use of behavioral research can be ignored for long. Likewise, the very nature of the renewed activity at the FTC directed toward consumer protection places the FTC in the position of eventually having to turn to behavioral research unless complaints by the FTC are to regress to the trivial level. The reason for this last statement is not readily obvious. It is however based on the assumption that within the realm of consumer protection, those activities that represent a flagrant violation of anti-trust law are rather limited. The traditional methods for seeking justice, i.e., showing that a number of people were injured or could be injured by an activity, are quite sufficient for remedying those types of practices. There are also a rather large number of rather minor violations of anti-trust law that can be handled by showing that an advertisement contained some falsehood or that price was in some way deceptive. Once the flagrant violations are successfully stopped and precedent set as a warning to others who might engage in the same practice, the choice of what to do next has at least one alternative --- to file complaints against more minor violations. Emphasis on this latter approach is the very issue dealt with in the American Bar Association report on the Federal Trade Commission and the subsequent Nader report (Cox, Fellmuth, and Schute, 1969). Both reports severely criticized the commission for concentrating on trivial matters. Therefore, as flagrant violations of anti-trust law in the consumer protection field are dealt with, the FTC is unlikely to turn to trivial matters, because-it-has become quite clear this is not what Congress demands. This implies that eventually the FTC will ask questions that may only be answered by the behavioral sciences.

In addition, we can predict that as these questions are asked, the FTC will somehow try to gain control of some aspect of the behavioral sciences. It seems difficult to comprehend at this stage of development but dynamic homeostasis leads to the prediction that the FTC will eventually have a significant in-house behavioral capacity that will have the capacity to make significant contributions to the field of applied behavioral science.

The second reason we can expect change is that this change has already started to take place. In 1972 the FTC started a program of bringing academic consultants with behavioral science training into the organization for periods ranging from six months to a year. To date seven people have participated in the program. In addition, one major case has included behavioral research data, the planning for one case included behavioral research inputs, two consent orders have included decision rules based on behavioral research and at present a major research study is being conducted in conjunction with a major complaint. This is not to imply that all has gone well, nor will go well in the future of behavioral research and the FTC, In fact the case in which behavioral research was involved was a grave disappointment. Also, even though four of the seven people have worked directly with the planning arm of the FTC, there is little evidence they have made any inroads.

The Stance of the Behavioral Scientist

Does the above suggest that eventually the FTC will come rushing into the arms of the behavioral research community and that a harmonious marriage is forthcoming? Not al all. One has only to review the four reasons for the steady state to understand why the road will be rocky. But there are other equally serious reasons. In sum, we as behavioral scientists are not ready for the FTC.

In a discussant paper at the P.D.Converse Social Marketing Conference, Gardner (1972) suggested our problems as behavioral scientists fall into two categories: gaps in existing knowledge and type of research orientation. The gap comes about for two reasons. First, the specific field of consumer behavior has borrowed heavily from the basic concepts of social psychology. This has often been done without a careful assessment of the transferability of these basic concepts to the study of consumer behavior. It is an often ignored fact that the objectives of social psychology are not necessarily the same as those associated with the study of consumer behavior. Since few of the concepts of social psychology have been specifically tested in the realm of consumer behavior, we can often only talk in terms of generalities concerning consumer behavior.

The second reason for the gap is that we lack comprehensive testing of a model of consumer behavior. The Howard and Sheth (1969) model of buyer behavior is a notable attempt, but to date no conclusive comprehensive validation has been published. The reason for lack of comprehensive validation and development of alternative models is due to piecemeal research projects, often based on questionable or non-existent theoretical foundations.

The research orientation taken by most academic researchers is understandable from an academic point of view, but unfortunately not of much potential use by the FTC. The reasons for the low level of applicability of academic research to the problems facing the FTC seem to be: an implicit marketing management orientation, a strong interest in techniques, and a lack of research programming that goes beyond individual studies.

Most researchers in the area of consumer behavior comes from the ranks of business schools or business firms. Their research often contains subtle biases and a marketing management orientation. In addition, much of the existing research is concerned with segmentation and psychographics, not with how information is understood and how impressions are formed.

The field of consumer research needs badly the current interest in the development of multivariate research procedures. Furthermore, the development of new techniques is very often a rewarding experience. But the application of these techniques to the study of consumer behavior lagged years behind their development. As one small example, this writer has been unable to find one study that sets out to measure attitudes based on multi-attribute attitude theory. Rather, all studies deal with various aspects of the measurement problem.

The final reason is that no research interests or major areas of interest appear to have emerged. We have models, but our interest remains in small, "do-able" pieces of research because of the need to publish or perish, coupled with the absence of any organized groups of researchers, may go far toward explaining the absence of a coordinated, comprehensive approach.

A Step Forward

If the behavioral scientist interested in consumer research wants to be ready when the FTC is ready and furthermore wants to encourage the outreach of the FTC toward behavioral research, what can he do? First, he can realize that behavioral research is not welcomed with open arms by attorneys. Those factors promoting the steady state should argue this point convincingly. Second, effort should be made to develop research approaches and research results that can be used by attorneys as they plan and make complaints. It will do little good for the FTC to decide to incorporate behavioral research into their decision making when techniques and models to guide research are non-existent. Third, the value of research must be sold --but sold realistically In order to be sold realistically it requires that the seller know more about the buyer than he knows about himself. This is not accomplished by the researcher flying in from Campusville and presenting his grandiose plan to the Commissioners of the FTC. Rather, it is accomplished by individuals and groups becoming intimately acquainted with the FTC so they speak to the problems of the FTC in language that reflects the special needs of those who will ultimately use and understand research inputs. Fourth, realize the difference between applied and basic research. The FTC has little need for research that advances the underpinnings of a construct. Rather the FTC is concerned with knowing what people believe and do. Often, they are not even concerned with the why of it all.

The revitalization of the FTC in recent years has given hope to behavioral researchers that as of today has largely been unfulfilled. But we shouldn't despair because the FTC is an open system --- and because we can predict that the hope will be fulfilled. But let us be ready !

REFERENCES

Cox, E., Fellmuth, R. and Schute, J. The Nader report on the Federal Trade Commission. New York: Richard Baron, 1969.

Gardner, D.M. Consumer information: some public policy research implications. Paper presented at the P.D.Converse Social Marketing Conference, University of Illinois, December, 1972.

Howard, J.A. and Sheth, J.N. The Theory of Buyer Behavior. New York: John Wiles. 1969.

Katz, D. and Kahn, D. The Social Psychology of Organizations. New York: John Wiley, 1966.

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