๐Ÿ’Ž Abundance is the enemy of appreciation (on the benefits of abstinence)

But there’s a way to maximize the pleasure of that second confection. Temporarily giving up chocolate can restore our ability to enjoy it. After an initial chocolate tasting, students promised to abstain from chocolate for one week. Another group of students pledged to eat as much chocolate as they comfortably could, and they received a two-pound bag of chocolate to help them fulfill their pledge. The students who left with this reservoir of chocolatey goodness may seem like the lucky ones. But their sweet windfall came at a price. When they returned the following week to sample additional chocolate, they enjoyed it much less than they had the week before. People only enjoyed chocolate as much the second week as they had the first if they had given it up in between.”

Except from:ย Happy Money: The New Science of Smarter Spending by Elizabeth Dunn and Michael Norton

๐Ÿ’Ž Experiences are less likely to suffer from the problem of unflattering comparisons than possessions (we like to compare ‘things’)

The apples-and-oranges quality of experiences also makes it easier to enjoy them in the moment, unfettered by depressing comparisons. Researchers at Cornell gave students a Pilot G2 Super Fine pen as a prize and asked them to try it out. When it was surrounded by inferior prizes, including an unsharpened pencil and a bag of rubber bands, the students gave the pen rave reviews. Other students saw the same pen alongside a USB drive and a leatherbound notebook. The presence of more desirable goods significantly diminished the pen’s appeal. This simple study illustrates one of the major barriers to increasing human well-being. We are happy with things, until we find out there are better things available.

Luckily, this tendency may be limited to things. Even the simplest experiences, like eating a bag of crisps, are relatively immune to the detrimental effects of attractive alternatives. Offered the chance to eat a bag of crisps, students enjoyed the crisps’ crunchy goodness regardless of whether the surrounding alternatives included Cadbury’s chocolate or clam juice.

Except from:ย Happy Money: The New Science of Smarter Spending by Elizabeth Dunn and Michael Norton

๐Ÿ’Ž On our minds working on problems even when we’re not consciously thinking about them (John Cleese)

Graham and I thought it was rather a good sketch. It was therefore terribly embarrassing when I found I’d lost it. I knew Graham was going to be cross, so when I’d given up looking for it, I sat down and rewrote the whole thing from memory. It actually turned out to be easier than I’d expected.

Then I found the original sketch and, out of curiosity, checked to see how well I’d recalled it when rewriting. Weirdly, I discovered that the remembered version was actually an improvement on the one that Graham and I had written. This puzzled the hell out of me.

Again I was forced to the conclusion that my mind must have continued to think about the sketch after Graham and I had finished it. And that my mind had been improving what we’d written, without my making any conscious attempt to do so. So when I remembered it, it was already better.

Chewing this over, I realised it was like the tip-of-the-tongue phenomenon: when you can’t remember a name, and you chase after it in your mind

Excerpt from: Creativity: A Short and Cheerful Guide by John Cleese

๐Ÿ’Ž The importance of leaving room for the audience to participate whether it’s a screenplay or an ad (arriving late and leaving early)

Goldman has never written a commercial in his life yet you’ll learn more from his storytelling on how to write for the screen than you will from some advertising expert. And you’ll learn in a memorable and entertaining way – what could be better? There is one piece of advice he offers, in particular, about writing a scene that I love. || It’s a piece of advice that could be well employed by most writers: ‘Come in late, leave early’. || And Goldman’s not talking about the hours you keep. His point is that most writers leave nothing for the audience to do โ€“ the writer over explains. || When you write a scene, and it could be a screenplay or it could be a television commercial, whatever you do, you must leave room for the audience to participate. You have to get them engaged in the process โ€“ that way you’ll get them wanting more. || With screenwriting you move from scene to scene, twisting, turning and surprising, so predictability is the death of a screenplay, as it is for those of us who write television commercials.

If I can work out what’s coming why bother watching? Surprise is a fundamental factor in making something memorable.

Excerpt from:ย Hegarty on Advertising: Turning Intelligence into Magic by John Hegarty

๐Ÿ’Ž Contingent rewards can reduce intrinsic motivation (we are motivated by uncertainty)

Mark Lepper, David Greene, and Richard Nisbett (1973) conducted research on this question. They divided children into three groups:

  1. Group 1 was the Expected group. The researchers showed the children the Good Drawing Certificate and asked if they wanted to draw in order to get the certificate.
  2. Group 2 was the Unexpected group. The researchers asked the children if they wanted to draw, but didn’t mention anything about a certificate. After the children spent time drawing, they received an unexpected drawing certificate.
  3. Group 3 was the Control group. The researchers asked the children if they wanted to draw, but didn’t mention a certificate and didn’t give them one.

The real part of the experiment came two weeks later. During playtime the drawing tools were put out in the room. The children weren’t asked anything about drawing; the tools were just put in the room and available. So what happened? Children in the Unexpected and Control groups spent the most time drawing. The children in Expected group, the ones to had received an expected reward, spent the least time drawing. Contingent rewards (rewards based on specific behavior that is spelled out ahead of time) resulted in less of the desired behavior if the reward was not repeated. Later the researchers went on to do studies like this, with adults as well as children, and found similar results.

Excerpt from: 100 Things Every Designer Needs to Know About People (Voices That Matter)ย by Susan Weinschenk

๐Ÿ’Ž On how making people laugh boosts perceptions of competence and status

In one study, some of our colleagues from the Second city retreatโ€”Brad Bitterly, Maurice Schweitzer, and Alison Wood Brooksโ€”recruited participants to write and present testimonials for Visit Switzerland, a fictional travel company. What the group didnโ€™t know is that the first two โ€œparticipantsโ€ who read their testimonials were research assistants. Half of their prewritten testimonials were serious, the other half were funny (eg., serious testimonial โ€œThe mountains are great for skiing and hiking. Itโ€™s amazing!โ€ vs. humorous testimonial โ€œThe mountains are great for skiing and hiking, and the flag is a big plus!โ€). …*

When participants were asked to rate the presenters on a handful of qualities, those presenting the humorous testimonial were perceived as 5 percent more competent, 11 percent more confident, and 37 percent higher in status.

In other words, a six-word throwaway pun at the end of a testimonial meaningfully swung opinions.

Excerpt from: Humour, Seriously: Why Humour Is A Superpower At Work And In Life by Jennifer Aaker and Naomi Bagdonas

๐Ÿ’Ž If it’s hard to read, it’s hard to do (make it easy)

Tuck your chin into your chest, and then lift your chin upward as far as possible. 6-10 repetitions.

Lower your left ear toward your left shoulder and then your right ear toward your right shoulder. 6-10 repetitions.

Excerpt from: 100 Things Every Designer Needs to Know About People (Voices That Matter)ย by Susan Weinschenk

๐Ÿ’Ž On the danger of a theory free analysis of mere correlations (winter detector)

The ‘winter detector’ problem is common in big data analysis. A literal example, via computer scientist Sameer Singh, is the pattern-recognising algorithm that was shown many photos of wolves in the wild, and many photos of pet husky dogs. The algorithm seemed to be really good at distinguishing the two rather similar canines; it turned out that it was simply labelling any picture with snow as containing a wolf. An example with more serious implications was described by Janelle Shane in her book You Look Like a Thing and I Love You: an algorithm that was shown pictures of healthy skin and of skin cancer. The algorithm figured out the pattern: if there was a ruler in the photograph, it was cancer. If we don’t know why the algorithm is doing what it’s doing, we’re trusting our lives to a ruler detector.

Excerpt from: How to Make the World Add Up: Ten Rules for Thinking Differently About Numbers by Tim Harford

๐Ÿ’Ž Short deadlines can be more effective at encouraging behaviour than long ones (Big Ben Problem)

The Big Ben Problem suggests that introducing a limited time window may encourage people to seize opportunities for treats. Imagine you’ve just gotten a gift certificate for a piece of delicious cake and a beverage at a high-end French pastry shop. Would you rather see the gift certificate stamped with an expiration date two months from today, or just three weeks from now? Faced with this choice, most people were happier with the two-month option, and 68 percent reported that they would use it before this expiration date. But when they received a gift certificate for a tasty pastry at a local shop, only 6 percent of people redeemed it when they were given a two month expiration date, compared to 31 percent of people who were given the shorter three-week window. People given two months to redeem the certificate kept thinking they could do it later, creating another instance of the Big Ben Problem

Except from:ย Happy Money: The New Science of Smarter Spending by Elizabeth Dunn and Michael Norton

๐Ÿ’Ž One danger of the increasing move to digital payments is the reduction in the pain of payment (overspending)

This detachment also makes it harder to remember how much we’ve spent. When researchers asked thirty people to estimate their credit card expenses before opening their monthly bill, every single individual underestimated the size of their billโ€”by an average of almost 30 percent.

Except from:ย Happy Money: The New Science of Smarter Spending by Elizabeth Dunn and Michael Norton

๐Ÿ’Ž On the power of sparking the audience (curiosity)

I can think of nothing an audience won’t understand. The only problem is to interest them; once they are interested they understand anything in the world.


Excerpt from: How to Make the World Add Up: Ten Rules for Thinking Differently About Numbers by Tim Harford

๐Ÿ’Ž Six psychological biases that help explain why we fail to prepare for disasters

1. Myopia: a tendency to focus on overly short future time horizons when appraising immediate costs and the potential benefits of protective investments;
2. Amnesia: a tendency to forget too quickly the lessons of past disasters;
3. Optimism: a tendency to underestimate the likelihood that losses will occur from future hazards;
4. Inertia: a tendency to maintain the status quo or adopt a default option when there is uncertainty about the potential benefits of investing in alternative protective measures:
5. Simplification: a tendency to selectively attend to on subset of the relevant factors to consider when making choices involving risk; and
6. Herding: a tendency to base choices on the observed actions of others.

Excerpt from: The Ostrich Paradox: Why We Underprepare for Disasters by Robert Meyer and Howard Kunreuther

๐Ÿ’Ž Our motivation to finish a task grows if we feel we have already made some starting steps (Goal Gradient Effect)

In one study, experimenters distributed coffee reward cards, with 10 stamps earning a free cup of coffee.

Condition 1: a 10-stamp card with no stamps filled.

Condition 2: a 12-stamp card with two stamps already filled in.

Participants in the second condition purchased more coffee and at a higher rate than participants in the first condition. Furthermore, participants accelerated their coffee consumption when they got closer to their prize.


Ensure the first step of any journey is simple to accomplish and continue to recognise progress along the way. Avoid making people feel they are starting afresh.

Excerpt from: The Unseen Mind by Ogilvy UK

๐Ÿ’Ž Higher happiness only correlates with increased spend in one category (leisure)

One ongoing U.S. study has tracked how much money adults over age fifty spend on just about everything, from refrigerators and rent to alcohol and art. When researchers link these spending choices to happiness, only one category of spending matters. And it’s not refrigerators, or even alcohol. It’s what the researchers label โ€œleisureโ€: trips, movies, sporting events, gym memberships, and the like. People who spend more of their money on leisure report significantly greater satisfaction with their lives. Not surprisingly the amount of money these older adults reported spending on leisure was dwarfed by the amount they spent on housing. But housing again turned out to have zero bearing on their life satisfaction.

Except from: Happy Money: The New Science of Smarter Spending by Elizabeth Dunn and Michael Norton

๐Ÿ’Ž Why you should choose some who doesnโ€™t look the part (whether youโ€™re picking a surgeon or a strategist)

Say you had the choice between two surgeons of similar rank in the same department in some hospital. The first is highly refined in appearance; he wears silver-rimmed glasses, has a thin build, delicate hands, measured speech, and elegant gestures. His hair is silver and well combed. He is the person you would put in a movie if you needed to impersonate a surgeon. His office prominently boasts Ivy League diplomas, both for his undergraduate and medical schools.

The second one looks like a butcher; he is overweight, with large hands, uncouth speech, and an unkempt appearance. His shirt is dangling from the back. No known tailor on the East Coast of the U.S. is capable of making his shirt button at the neck. He speaks unapologetically with a strong New Yawk accent, as if he wasn’t aware of it. He even has a gold tooth showing when he opens his mouth. The absence of diplomas on the wall hints at the lack of pride in his education: he perhaps went to some local college. In a movie, you would expect him to impersonate a retired bodyguard for a junior congressman, or a third generation cook in a New Jersey cafeteria.

Now if I had to pick, I would overcome my sucker-proneness and take the butcher any minute. Even more: I would seek the butcher as a third option if my choice was between two doctors who looked like doctors. Why? Simply the one who doesn’t look the part, conditional on having made a (sort of) successful career in his profession, had to have much to overcome in terms of perception. And if we are lucky enough to have people who do not look the part, it is thanks to the presence of some skin in the game, the contact with reality that filters out incompetence, as reality is blind to looks.

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

๐Ÿ’Ž When iTunes first released its shuffle feature it was truly random (but people don’t like truly random)

When iTunes first released its shuffle feature received a slew of angry emails. The complaints came from customers who claimed the feature was broken because, when they clicked the “shuffleโ€ button on their *NSYNC album, the tracks sometimes played in order. People felt cheated. How could a random algorithm produce three songs in the same order as they appear on the actual album? Random should mean 7, 11, 3, not 1, 2, 3, right? Except that when song selection is truly random, each song has the same probability of playing each time the current song ends. Sometimes that means 7, 11, 13, but sometimes that means 1, 2, 3 instead.

In response, iTunes changed their randomness algorithm to avoid such sequential ordering. The new algorithm feels more random to us humans despite it being objectively less random.

Excerpt from: Blindsight: The (Mostly) Hidden Ways Marketing Reshapes Our Brains by Matt Johnson and Prince Ghuman

๐Ÿ’Ž Stacking can make the adoption of new habits easier (like flossing)

In evidence that stacking works, consider dental floss. Many of us clean our teeth regularly but fail to floss. To test whether stacking increases flossing, researchers gave fifty British participants, who flossed on average only 1.5 times per month, information encourage them to do it more regularly.

Half of the participants were told to floss before they brushed at night, and half after they brushed. Note that only half of the participants were really stacking-using an existing automated response (brushing their teeth) as a cue for a new behavior (flossing). The other half, who first flossed and then brushed, had to remember, oh, yes, first I need to floss, before I brush. No automated cue.

Each day for four weeks, participants reported by text whether they flossed the night before. At the end of the month of reminders, they all flossed about twenty-four days on average. Most interesting is what they were all doing eight months later. Those who stacked, and flossed after they brushed, were still doing it about eleven days a month. For them, the new behavior was maintained by the existing habit. The group originally instructed to floss before they brushed ended up doing it only about once a week.

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

๐Ÿ’Ž We often overestimate how much events (or purchases) will change our happiness (as we tend to forget how quickly we adapt)

While we each may initially react quite differently to an event, we all have a built-in ability to detect and neutralize challenges to our happiness. This has been called our psychological immune system. Just as your body adjusts to getting into hot water, so your mind adjusts to change: the psychological reaction to changes in stimuli is analogous to the physiological reaction to changes in temperature. And your psychological immune system works a little like your physical immune system, which kicks in when faced with a threat, such as when someone nearby coughs or sneezes. This highlights the fact that many adaptation processes take place automatically and unconsciously, we simply get used to some changes without thinking about whether or not we really want to.

In one of the most interesting studies in this area, students were asked to predict how much worse their mood would be if they were rejected for a job: their average estimate was two points lower than their current mood on a ten-point scale. In sharp contrast, the actual being rejected was only 0.4 points on the same ten-point scale that effect was fleeting: ten minutes after the rejection, their happiness levels had returned to normal. By the way, there was no real job offer-such is the fun that psychologists often have at their students’ expense.

If your partner dumps you, give it a few months and you’ll generally look back on your partner as having been unsuitable. Chances are that you will then meet someone who makes you happier than that loser did. This is not to say that the pain of the breakup is any less real, just that you can take some comfort from it not lasting.

Excerpt from: Happiness by Design: Change What You Do, Not How You Think by Paul Dolan

๐Ÿ’Ž The more we think about an event, the more we think itโ€™s likely to happen (often wrongly)

One of the earliest experiments examining the power of imagination to sway intuition was conducted during the U.S. presidential election campaign of 1976. One group was asked to imagine Gerald Ford winning the election and taking the oath of office, and then they were asked how likely it was that Ford would win the election. Another group was asked to do the same for Jimmy Carter. So who was more likely to win? Most people in the group that imagined Ford winning said Ford. Those who saw Jimmy Carter taking the oath said Carter. Later experiments have obtained similar results. What are your odds of being arrested? How likely is it you’ll win the lottery? People who imagine the event consistently feel the odds or the event actually happening are higher than those who donโ€™t.

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

๐Ÿ’Ž The labour illusion (or why incompetence sometimes pays)

But would he have preferred that the locksmith bumble around, take a long time and fake effort? Well, maybe. A locksmith once told Dan that when he started his career, he took forever to open a lock, and in the process, he often broke it, taking even more time and money to get one properly installed and finish the job. He charged for the parts to replace the broken lock as well as his standard fee for opening a locked door. People were happy to pay all this, and they tipped him well. He noticed, however, that as he became proficient and opened a lock quickly, without breaking the old lock (and without the consequent need to replace it and charge his clients for the extra parts), customers not only didn’t tip, but they also argued about his fee.

Wait, what? How much is it worth to have our door open? That should be the question. But because it’s difficult to put a price on this, we look at how much effort it takes to have that door unlocked. When there’s a great deal of effort, we feel much better about paying more. But all that should matter is the value of that open door.

Excerpt from: Small Change: Money Mishaps and How to Avoid Them by Dan Ariely and Jeff Kreisler

๐Ÿ’Ž Repetition increases our tendency to act (but it weakens our sensation of the act)

The little-known nineteenth-century French philosopher Fรฉlix Ravaisson was able to put this concept into concrete terms. He called it the double law of habit. Basically it means this: repetition strengthens our tendency to act, but it also weakens our sensation of that act. In other words, we habituate. It’s a deceptively complex process, and one that has power to sap force and meaning from our lives. We tend to keep doing things long after they have lost meaning for us. Yes, we can take advantage of that dynamic when we form new habits, as they lose their hard edges with repetition. But it’s a double-edged sword.

Habituation is one reason we lose interest in the material stuff we buy (thinking those things will finally make us happy). Certainly, you enjoyed sitting on your new couch the day it was delivered. And you got to show it off to your friends the next time they visited. But after that? You probably don’t notice it much now.

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

๐Ÿ’Ž On the puzzling fact that only so few ad agency staff are over 50 (unlike other creative industries)

We’ll start with the Nobel Prize. There is only one Nobel Prize in a creative field. It is the prize for Literature. It went to Kazuo Ishiguro who is 64.

The Pulitzer Prize is awarded in several creative fields. The Pulitzer for Drama went to Lynn Nottage who is 54. The Pulitzer for History went to Heather Ann Thompson, age 55. The Pulitzer for Poetry went to Tyehimba Jess, age 53.

Next we move to television. The Emmy for Best Drama Series went to The Handmaid’s Tale. The novel was written by Margaret Atwood who was 79 and was creative consultant on the show. The Best Comedy Series went to Veep, executive produced by Julia Louis-Dreyfus, 57. She also won for Best Actress. Best Limited Series went to Big Little Lies created by David E Kelley, 62. The Best Supporting Actress was Ann Dowd, 62. Best Supporting Actor was John Lithgow, 73. Best Supporting Actor in a Comedy Series went to Alec Baldwin, 60.

So, let’s recap. People over 50 are creative enough to dominate in Nobels, Pulitzers, Oscars, and Emmys but are not creative enough to write a fucking banner ad. I guarantee you, not one of these brilliantly talented people could get a job in an ad agency today. Not one.

Excerpt from: Advertising for Skeptics by Bob Hoffman

๐Ÿ’Ž Multiple rewards may be averaging, rather than additive (one great reward is perceived as better than a great reward and a mediocre one)

On Hallowe’en, twenty-eight trick-or-treaters with the average age of around ten came to the house. All the kids were given different combinations of candy and asked to rate their happiness levels in relation to it. Seven different happiness levels were shown by using smiley face symbols ranging from neutral to open-mouthed-grin smiley face’. Some kids were given a full-size Hershey’s chocolate bar, some kids were given a piece of gum, some kids were given first a Hershey’s bar then a piece of gum, and some kids were given first a Hershey’s bar then another Hershey’s bar. You would expect more candy to equal more happiness. But the children getting a chocolate bar then a piece of gum were less happy than the kids who received just the chocolate bar. And two chocolate bars did not bring more happiness than one chocolate bar.

Excerpt from: The Art of Making Memories: How to Create and Remember Happy Moments by Meik Wiking

๐Ÿ’Ž How our perception of risk is skewed by โ€œwhat makes a good story or hypothesisโ€(rather than a cold calculation of the odds)

Many other studies produced similar results. Kahneman and Tversky divided 245 undergrads at the University of British Columbia in half and asked one group to estimate the probability of a massive flood somewhere in North America in 1983, in which more than 1,000 people drown.’ The second group was asked about an earthquake in California sometime in 1983, causing a flood in which more than 1,000 people drown.’ Once again, the second scenario logically has to be less likely than the first but people rated it one-third more likely than the first. Nothing says ‘California’ quite like โ€˜earthquakeโ€™.

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

๐Ÿ’Ž On the persistence of musical memory (even late stage Alzheimerโ€™s patients)

The most striking examples of the persistence of musical memory come from observation of patients suffering from dementia. Late-stage Alzheimer’s patients who have difficulty recognizing family members and familiar objects can still recognize familiar songs. In some instances, these patients are able to sing despite having lost the ability to speak.”

The unique strength of musical memory has puzzled researchers for years, but one possible reason for the robustness of musically encoded memory is that music is encoded by several different regions of the brain. While auditory regions are primarily involved, so are parts responsible for imagery and emotion. Because musical memories are laid down in multiple brain regions, stimulating any one of these regions may spark their retrieval. It also may be the reason musical memory persists so long in dementia patients. If one brain region becomes damaged, the other, healthy regions can pick up the slack, theoretically providing “backups.”

Excerpt from: Blindsight: The (Mostly) Hidden Ways Marketing Reshapes Our Brains by Matt Johnson and Prince Ghuman

๐Ÿ’Ž How Sears outdid their main competitor (by making their catalogue slightly smaller)

And it inspired competitors โ€“ 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 โ€“ 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

๐Ÿ’Ž If youโ€™re creating funny ads for your brand best to run them in programmes that get watched in groups (itโ€™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

๐Ÿ’Ž 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

๐Ÿ’Ž 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