Author: David Greenwood

💎 It’s well proven that price affects quality perceptions (but its effect is weighted on a number of factors)

Völckner and Hofmann (2007) analyzed 71 studies from 23 publications spanning from 1989 to 2006. The researchers distilled following findings:

  • The impact of price on quality perception is significant but has decreased since reported in the late 1980s (Rao and Monroe 1989).
  • Price-quality inference is stronger for higher-priced products.
  • Price-quality inferences decrease with increasing familiarity with the product.
  • Price-quality inference is stronger for fast-moving consumer goods than for services or durable goods.
  • Price-quality inference is stronger in European countries than in North American countries.

Excerpt from: The Psychology of Price: How to use price to increase demand, profit and customer satisfaction by Leigh Caldwell

💎 We start guessing the end of sentence before finishing it (the order in which writers place their words matters)

According to Bergen, we start modelling words as we start reading them. We don’t wait until we get to the end of the sentence. This means the order in which writers place their words matters. This is perhaps why transitive construction – Jane gave a Kitten to her Dad – is more effective than the ditransitive – Jane gave her Dad a kitten. Picturing Jane, then the Kitten, then her Dad mimics the real-world action that we, as readers, should be modelling. It means we’re mentally experiencing the scene in the correct sequence. Because writers are, in effect, generating neural movies in the minds of their readers, they should privilege word order that’s filmic, imagining how their reader’s neural camera will alight upon each component of a sentence.

For the same reason, active sentence construction – Jane kissed her Dad – is more effective than passive – Dad was kissed by Jane. Witnessing this in real life, Jane’s initial movement would draw our attention and then we’d watch the kiss play out. We wouldn’t be dumbly staring at Dad, waiting for something to happen.

Excerpt from: The Science of Storytelling by Will Storr

💎 Initial randomness amplified by social proof makes predicting the popularity of things tricky (restaurants are a good example)

Imagine two restaurants of comparable quality. Along came the first customer, who has to choose between the two he flips a coin and picks restaurant A. Now imagine the next customer. Confronted with the same choice, she has the same information plus she sees the first customer sitting in the window of restaurant A. What does she do?

You can see where this is going.

But at this point, restaurant B still has hope-how much does the second customer trust the first customer’s choice? Well, is he attractive? Does he smoke? How’s he dressed? What’s his posture? The more the second person identifies with the first, the more she trusts his choice.

Once the second customer chooses restaurant A too, it starts to solidify a consensus. The third customer would have to buck a significant trend, voting against two people, in order to choose restaurant B.

Soon, you can imagine a line put the door of restaurant A, while restaurant B sits empty – despite the restaurants’ similar quality.

Excerpt from: Brain Candy: Science, Paradoxes, Puzzles, Logic, and Illogic to Nourish Your Neurons by Garth Sundem

💎 How Sears outdid their main competitor (by making their catalogue slightly smaller)

And it inspired competitors – notably Sears Roebuck, which soon became the market leader. (The story goes that the Sears Roebuck catalogue had slightly smaller pages than Montgomery Ward’s – with the intention that a tidy-minded housewife would naturally stack the two with the Sears catalogue on top.)

By the century’s end, mail-order companies were bringing in $30 million a year – a billion-dollar business in today’s terms; in the next twenty years, that figure grew almost twenty-fold. The popularity of mail order helped fuel demands to improve the postal service in the countryside – if you lived in a city, you’d get letters delivered to your door, but rural dwellers had to schlep to their nearest post office.

Excerpt from: The Next Fifty Things that Made the Modern Economy by Tim Harford

💎 If you’re creating funny ads for your brand best to run them in programmes that get watched in groups (it’ll make them even funnier)

The contagious effect of humour explains the results of a 1991 experiment conducted by University of Houston psychologists, Yong Zhang and George Zinkan.

They recruited 216 students to watch 30 minutes of music videos interspersed with soft drink commercials in groups of one, three and six. In order for the test to be as realistic as possible, the participants were told they were going to be questioned on their music preferences.

Their key finding was that ads tended to be rated as least funny when they were watched alone. In contrast, ads watched in groups of three and six were reported to be 21% and 10%, funnier than those watched alone.

The impact of groups might be due to social proof – this is the idea that people are influenced by others’ behaviour. If one person laughs, it encourages others to find the content funny.

Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton

💎 If/then tactics as a way to achieve goals (the bigger the goal, the better the results)

In hundreds of studies spanning all kinds of contexts from eating better to completing homework assignments to saving money to avoiding the impulse to react to people on the basis of their skin color-Gollwitzer and his colleagues have demonstrated the power of people taking the time to anticipate in advance the obstacles they might face when meeting future aspirations. For example, people who want to eat healthier might jot down all of the possible temptations they’ll face in a week to eat junk food, and then set up a plan to respond to each of those urges.

What’s surprising about Gollwitzer’s research on if/then techniques is that it reveals that the more difficult the long-term goal, the greater the power of the tactic. It works better, in other words, for the challenges that elude people’s sheer willpower.

Excerpt from: The Optimist’s Telescope: Thinking Ahead in a Reckless Age by Bina Venkataraman

💎 How workplace competition can backfire (dangers of “stack ranking” systems)

One well-known example of a dysfunctional workplace competition was GE’s “Rank-and-Yank” system, where the bottom 10% of the organization’s employees were fired on a regular basis. Another was Microsoft’s “Stack Racking” system, where an employee’s expectations for promotion were based on how they were ranked among their peers. A personal friend of mine who worked at GE many years ago stated, “The Rank-and-Yank system there made sure that everyone hired people weaker than themselves so they were never in danger of being yanked. When we interviewed a brilliant candidate, we made sure they never got the job because it would put ourselves in jeopardy or potentially result in a smaller bonus.”

A Vanity Fair article by Kurt Eichenwald cites that “Every current and former Microsoft employee I interviewed – everyone – cited stack ranking as the most destructive process inside of Microsoft. Peter Cohan from Forbes stated that, “[Stack Ranking) directed [Microsoft employees] to prevent their peers from getting outstanding performance reviews and brag about their accomplishments to each member of the management committee that determined their relative ranking.”

As you can see, workplace competition can be extremely destructive to company morale, especially during weak and uncertain economic conditions where people are preoccupied with getting laid off.

Excerpt from: Actionable Gamification: Beyond Points, Badges and Leaderboards by Yu-kai Chou

💎 How a Dutch lottery ingeniously harnesses regret aversion by allocating a lottery number to every household (postcode lottery)

Imagine you’re a student. You’re offered a free lottery ticket with the chance to win a 15 euro book token. You’re shown the ticket, and you notice the number on it. Then you’re given the chance to swap that ticket for a different one. In return for swapping tickets, you’ll get a free gift – a pen embossed with your university’s name. Would you agree to exchange the tickets or not?

When students at Tilburg University in the Netherlands were given this choice only 56 per cent of them went for it, even though their chances of winning the book token were the same and so they might as well have had the free pen.”

Perhaps you’re thinking it was the lousy gift that explained their reaction. Couldn’t the researchers have tempted the students with a slightly more enticing freebie? Maybe, but that’s not the issue. The important detail here is that the students were shown the number on the original lottery ticket. This meant that having swapped their original ticket for another, if the number on the original was drawn out of the hat, they would know they’d made the wrong decision.

That said, if you live in the Netherlands, some lottery organisers are one step ahead. In a fiendish example of the exploitation of regret aversion, they’ve designed a lottery in which everyone’s unique postcode is automatically entered into the draw. Although you can only win if you’ve paid for a ticket, in any given week you can look up to see whether you’d have won, if only you had bothered to enter.

Excerpt from: Mind Over Money: The Psychology of Money and How To Use It Better by Claudia Hammond

💎 How ‘take control’ morphed into ‘take back control’ (the language of Brexit)

The slogan started as just two words: “Take control.” Cummings loved its simplicity but felt something was missing. So he played around with different variations.

Cummings was well versed in loss aversion and the statue quo bias. He knew that people prefer to stick with things they’re already doing rather than do something new. And while “Take control” was fine, it implicitly agreed to the premise that leaving the EU was action and staying was inaction. Which played right into his opponents’ hands.

If only he could flip things around … make it seem like leaving was the status quo…

So, in a stroke of insight, he changed the slogan. It wasn’t much: just an extra word in between “Take” and “control.” But it completely changed the reference point. He added the word “back.” As in “Take back control.”

“’Back,’” Cummings wrote in his blog, “plays into a strong evolved instinct—we hate losing things, especially control.” “Back” triggered loss aversion. It made it seem like something had been lost, and that leaving the EU was a way to regain that.

When the British Election Study surveyed voters,four times as many people preferred the “Let’s take back control” language.

Excerpt from: Catalyst by Jonah Berger

💎 Highly emotive imagery is recalled equally as well as neutral imagery in the immediate term (but far better in the longer term)

In a study I conducted with Yonelinas at Davis, we presented volunteers with highly arousing emotional photos (mostly unpleasant photos of mutilated bodies and acts of violence) as well as neutral photos (people reading in a bookstore or employees working in an office). We then tested the volunteers’ memory of half the photos immediately after presenting them; we tested their memories of the rest of the photos twenty-four hours later. At first, it seemed that the volunteers’ memories of the emotional and neutral photos were not different; they remembered them equally well. However, when they came back to the lab a day later, something had changed. Now their recollection of the emotional photos was better than that of the neutral photos. The volunteers’ memories were not always more accurate, but they reported they were more vivid.”

Except from: The Optimism Bias: Why we’re wired to look on the bright side by Tali Sharot

💎 Consumers are far more likely to splurge windfall money than expected (gamblers beware)

Payday is not the only moment when customers spend more. Any time consumers receive a windfall, like birthdays or bonuses, they will increase their spending. Three Ohio University psychologists, Hal Arkes, Cynthia Joyner and Mark Prezzo, ran an experiment in 1994 exploring this phenomenon. When they recruited students for the experiment half were told a week before that they would be paid $3, while the rest expected to be given course credits. However, when the participants arrived at the experiment they were all given the same $3-dollar incentive.

The participants were given the chance to gamble with their cash on a simple dice game. Those who had been given cash in the windfall condition gambled on average $2.16 while those who had been fully expecting the money only frittered away $1.

Excerpt from: The Choice Factory: 25 behavioural biases that influence what we buy by Richard Shotton

💎 Group polarisation and the danger of surrounding yourself with people who share similar opinions (How correct am I?)

But they won’t. Decades of research has proved that groups usually come to conclusions that are more extreme than the average view of the individuals who make up the group. When opponents of a hazardous waste site gather to talk about it, they will become convinced the site is more dangerous than they originally believed. When a woman who believes breast implants are a threat gets together with women who feel the same way, she and all the women in the meeting are likely to leave believing they had previously underestimated the danger. The dynamic is always the same. It doesn’t matter what the subject under discussion is. It doesn’t matter what the particular views are. When like-minded people get together and talk, their existing views tend to become more extreme.

In part, this strange human foible stems from our tendency to judge ourselves by comparison with others. When we get together in a group of like-minded people, what we share is an opinion that we all believe to be correct and so we compare ourselves with others in the group by asking ‘How correct am I?’ Inevitably, most people in the group will discover that they do not hold the most extreme opinion, which suggests they are less correct, less virtuous, than others. And so they become more extreme. Psychologists confirmed this theory when they put people in groups and had them state their views without providing reasons why – and polarization still followed.

Excerpt from: Risk: The Science and Politics of Fear by Dan Gardner

💎 Uncertain rewards can often be more motivating than certain rewards (when caught up in the process)

Imagine that you are participating in an auction that involves chocolate coins as a reward. You can bid on a lot containing five coins or on a mystery lot that contains either three or five coins— you won’t know which until after your bid is accepted. Logically, the lot with five coins is worth more.

But it wasn’t. Researchers at the University of Chicago staged just this auction and found that the average bid for the guaranteed five coin lots was $1.25. The average bid for the mystery lot was $1.89. When asked, participants said the uncertain auction was more exciting. It didn’t increase the actual value of the reward. It just made the game more fun. Participants paid more to play and said they wanted to participate in the auction again. (The secret, though, was getting caught up in the process. When participants planned their bid in advance, they preferred the certain reward.)

Excerpt from: Good Habits, Bad Habits: The Science of Making Positive Changes That Stick by Wendy Wood

💎 Misrepresenting reality (so as to better reflect reality)

Our perceptional apparatus makes mistakes-distortions—in order lead us to more precise actions: ocular deception, it turns out, is a necessary thing. Greek and Roman architects misrepresented the columns of their temples, by tilting them inward, in order to give us the impression that the columns are straight. As Vitruvius explains, the aim is to “counteract the visual reception by a change of proportions.” A distortion is meant to bring about an enhancement for your aesthetic experience. The floor of the Parthenon is curved in reality so we can see it as straight. The columns are in truth unevenly spaced, so we can see them lined up like a marching Russian division in a parade.

Should one go lodge a complaint with the Greek Ministry of tourism claiming that the columns are not vertical and that someone is taking advantage of our visual mechanisms?

Excerpt from: Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb

💎 George Orwell’s rules for writing (never…)

i. Never use a metaphor, simile, or other figure of speech which you are used to seeing in print.
ii. Never use a long word where a short one will do.
iii. If it is possible to cut a word out, always cut it out.
iv. Never use the passive where you can use the active.
v. Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.
vi. Break any of these rules sooner than say anything outright barbarous.

Excerpt from: Words That Work: It’s Not What You Say, It’s What People Hear by Frank Luntz