💎 On how much we’re prepared to pay for a product being partly determined by what we compare it to (beer versus wine)

I ran an experiment among my colleagues using King Cobra, a little known variant of Cobra lager. It’s a strong Indian beer, with an ABV of 7.5%, and it comes in a 750ml serving, the same size as a wine bottle.

A little subterfuge was required. I told my colleagues that we needed to run some tastings for a client. I organised two separate tastings of the beer alongside half a dozen other drinks. The participants rated the taste of the drinks on a scale from one to ten and said how much they’d be prepared to pay for each one in a supermarket.

The twist was that in each tasting Cobra was served alongside a different selection of drinks: in the first case bottled beers; in the second wines. The accompanying drinks had a significant effect on the amount people were prepared to pay for Cobra. When it was accompanied by bottled beers they offered £3.75, but when it was served with a selection of wines that rose, by 28%, to £4.80.

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

💎 On how much we value a product partly depending on what we compare it to (choose your comparisons carefully)

Christopher Hsee, George Loewenstein, Sally Blount and Max H. Bazerman once ran an experiment in which they asked people browsing used textbooks how much they would pay for a music dictionary that had 10,000 words and was in perfect condition. Another group was asked how much they would pay for a music dictionary with 20,000 words but a torn front cover. Neither group knew about the other dictionary. On average, the students were willing to pay $24 for the 10,000-word dictionary and $20 for the cover-torn 20,000-word one. The cover – irrelevant to looking up words – made a big difference.

The researchers then cornered another group and presented them with both options simultaneously. Now the students could compare the two options side by side. That changed their perception of the products. In this easy-to-compare group, the students said they would pay $19 for the 10,000-word dictionary and $27 for the 20,000-word one with the torn cover. Suddenly, with the introduction of a more clearly comparable aspect – number of words – the larger dictionary became more valuable, despite the torn cover.

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

💎 On how survey answers can be swayed (by how question is asked)

For example, a questionnaire on the number of headaches people experience in one week was given to two different groups of subjects. One group had to indicate whether the number was 1-5, 6-10, 11-15, and so on, while the other was presented with the numbers broken down into 1-3, 4-6, 7-9, etc. The first group reported many more headaches than the second. Moreover, almost everyone is influenced by the two end points of a scale, tending to pick a number that is near the middle.

Excerpt from: Irrationality: The enemy within by Stuart Sutherland

💎 On how contactless payments reduce price sensitivity (beware overspend)

What about new payment technologies?

Recently we have seen a flurry of new payment methods – the most widespread of which are contactless cards. Gabrielle Hobday and I investigated how contactless cards affected price sensitivity by posing three questions to people leaving coffee shops in Central London:

How much did you spend?

What means of payment did you use?

Please can we see your receipt?

The last question was crucial, as it let us compare recollection with reality.

The findings were striking. People paying with cash typically overestimated their spend by 9%, whereas those using contactless cards underestimated by 5%. A stretch of 14 percentage points. Credit card estimates were, in contrast, spot on.

The variation is important: on a typical supermarket shop of £25, the 14% difference between recollections of spend on a contactless card and cash amounts to £3.50. Contactless cards could be the difference between remembering a shopping trip as expensive or cheap. It is this memory that determines whether shoppers return. A positive recollection can either be achieved by steep discounting, which erodes profits, or by an innovative approach to payment.

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

💎 On speculation about the future often being pointless (as it is little better than chance)

It’s fun to speculate about what those inventions might be, but history cautions against placing much faith in futurology. Fifty years ago, Herman Kahn and Anthony J. Wiener published The Year 2000: A Framework For Speculation. Their crystal-ball gazing got a lot right about information and communication technology. They predicted colour photocopying, multiple uses for lasers, ‘two-way pocket phones’ and automated real-time banking. That’s impressive. But Kahn and Wiener also predicted undersea colonies, silent helicopter-taxis and cities lit by artificial moons. Nothing looks more dated than yesterday’s technology shows and yesterday’s science fiction.

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

💎 On how modern tech can weaken our memory (smartphone cameras)

But a 2013 study conducted by Linda Henkel of Fairfield University pointed in that direction. Henkel noticed that visitors to art museums are obsessed with taking cell-phone shots of artworks and often are less interested in looking at the art itself. So she performed an experiment at Fairfield University’s Bellarmine Museum of Art. Undergraduates took a guided tour in which they were directed to view specific artworks. Some were instructed to photograph the art, and others were simply told to take note of it. The next day both groups were quizzed on their knowledge of the artworks. The visitors who snapped pictures were less able to identify works and to recall visual details.

Excerpt from: Head in the Cloud by William Poundstone

💎 On how deference to authority can distort memories (status and height)

In the experiment conducted by Wilson on 5 classes of Australian students a man was introduced as a visitor from Cambridge University in England. However, his status at Cambridge was represented differently in each of the classes. To one class, he was presented as a student; to a second class, a demonstrator; to another, a lecturer; to yet another, a senior lecturer; to a fifth, a professor. After he left the room, each class was asked to estimate his height. It was found that with each increase in status, the same man grew in perceived height by an average of a half inch, so that as the “professor” he was seen as two and a half inches taller than as the “student.”

Excerpt from: Influence: The Psychology of Persuasion by Robert Cialdini

💎 On how developments in seemingly inconsequential areas trigger much more improved developments in another (the hummingbird effect)

I have called this phenomenon “the hummingbird effect”: the process by which an innovation in one field sets in motion transformations in seemingly unrelated fields. The taste for coffee helped create the modern institutions of journalism; a handful of elegantly decorated fabric shops helped trigger the industrial revolution. When human beings create and share experiences designed to delight or amaze, they often end up transforming society in more dramatic ways than people focused on more utilitarian concerns.

Excerpt from: Wonderland: How Play Made the Modern World by Steven Johnson

💎 On the danger of grandiose marketing objectives (wishful bullshit)

Macho marketing language is common, but dangerous. And objective setting is where it’s perhaps most dangerous. Marketing plans are littered with words like ‘disrupting’ and ‘transforming’. Plans hardly ever use more modest, but more realistic, words like ‘nudging’, ‘reinforcing’ or ‘reassuring’ – they just don’t sound impressive enough. It probably doesn’t help that the box on the brief titled ‘objective’ has often been replaced nowadays by one called ‘ambition’ or ‘vision’. And when the brand plan writer won’t be there in two years’ time anyway, they may as well write wishful bullshit.

Excerpt from: How not to Plan: 66 ways to screw it up by Les Binet and Sarah Carter

💎 On the dangers of a mindless deference to authority (rectal earache)

Errors in the medicine patients receive can occur for a variety of reasons. However, a book entitled Medication Errors: Causes and Prevention by two Temple University pharmacology professors, Michael Cohen and Neil Davis, attributes much of the problem to the mindless deference given the “boss” of the patient’s case: the attending physician. According to Professor Cohen, “in case after case, patients, nurses, pharmacists, and other physicians do not question the prescription.” Take, for example, the strange case of the “rectal earache” reported by Cohen and Davis. A physician ordered ear drops to be administered to the right ear of a patient suffering pain and infection there. But instead of writing out completely the location “right ear” on the prescription, the doctor abbreviated it so that the instructions read “place in R ear. Upon receiving the prescription. the duty nurse promptly put the required number of ear drops into the patient’s anus.

Excerpt from: Influence: The Psychology of Persuasion by Robert Cialdini

💎 On the cumulative power of multiple small improvements (professional cycling)

Brailsford and his coaches began by making small adjustments you might expect from a professional cycling team. They redesigned the bike seats to make them more comfortable and rubbed alcohol on the tires for a better grip. They asked riders to wear electrically heated overshorts to maintain ideal muscle temperature while riding and used biofeedback sensors to monitor how each athlete responded to a particular workout. The team tested various fabrics in a wind tunnel and had their outdoor riders switch to indoor racing suits, which proved to be lighter and more aerodynamic.

But they didn’t stop there. Brailsford and his team continued to find 1 percent improvements in overlooked and unexpected areas. They tested different types of massage gels to see which one led to the fastest muscle recovery. They hired a surgeon to teach each rider the best way to wash their hands to reduce the chances of catching a cold. They determined the type of pillow and mattress that led to the best night’s sleep for each rider. They even painted the inside of the team truck white, which helped them spot little bits of dust that would normally slip by unnoticed but could degrade the performance of the finely tuned bikes.

As these and hundreds of other small improvements accumulated…

Excerpt from: Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones by James Clear

💎 On how random clusters are mistaken for patterns (let the rice rain down)

To see why, stand on the carpet – but choose one with a pile that is not too deep (you might in any case want a vacuum cleaner to hand) – take a bag of rice, pull the top of the packet wide open … and chuck the contents straight into the air. Your aim is to eject the whole lot skyward in one jolt. Let the rice rain down.

What you have done is create a chance distribution of rice grains over the carpet. Observe the way the rice is scattered. One thing the grains have probably not done is fall evenly. There are thin patches here, thicker ones there and, every so often, a much larger and distinct pile of rice: it has clustered.

Wherever cases of cancer bunch, people demand an explanation. With rice, they would see exactly the same sort of pattern, but does it need an explanation? Imagine each grain of rice as a cancer case falling across the country. The example shows that clustering, as the result of chance alone, is to be expected. The truly weird result would be if the rice had spread itself in a smooth, regular layer. Similarly, the genuinely odd pattern of illness would be an even distribution of cases across the population.

Excerpt from: The Tiger That Isn’t: Seeing Through a World of Numbers by Andrew Dilnot and Michael Blastland

💎 On conformity having deep roots (nut cracking)

The normal behavior of the tribe often overpowers the desired behavior of the individual. For example, one study found that when a chimpanzee learns an effective way to crack nuts open as a member of one group and then switches to a new group that uses a less effective strategy, it will avoid using the superior nut cracking method just to blend in with the rest of the chimps.

Humans are similar. There is tremendous internal pressure to comply with the norms of the group.

Excerpt from: Atomic Habits: An Easy and Proven Way to Build Good Habits and Break Bad Ones by James Clear

💎 On making communication entertaining and to the point (nobody wants to read your shit)

Nobody wants to read anything.

Let me repeat that. Nobody—not even your dog or your mother—has the slightest interest in your commercial for Rice Krispies or Delco batteries or Preparation H. Nor does anybody care about your one-act play, your Facebook page or your new sesame chicken joint at Canal and Tchoupitoulas.

It isn’t that people are mean or cruel. They’re just busy.

Nobody wants to read your shit.

Excerpt from: The War of Art: Break Through the Blocks and Win Your Inner Creative Battles by Steven Pressfield

💎 On strongest memory of taste tending to be the first bite (olfactory change blindness)

We are all in a constant state of ‘olfactory change blindness’. Intriguingly, this is something that the food companies have been trying to exploit to their, and hopefully our, advantage for a few years now. The basic idea is that you load all the tasty but unhealthy ingredients into the first and possibly last bite of a food, and reduce their concentration in the middle of the product, when the consumers are not paying so much attention to the tasting experience. Just think about a loaf of bread with the salt asymmetrically distributed towards the crust. The consumer will have a great-tasting first bite, and then their brain will ‘fill in’ the rest by assuming that it tastes exactly like the first mouthful did. This strategy will probably work just as long as the meal isn’t high tea and the taster eating cucumber sandwiches with the crusts cut off! Or imagine something like a bar of chocolate, which most people will presumably start and finish at the ends, not in the middle. In fact, Unilever has a number of patents in just this space.

Excerpt from: Gastrophysics: The New Science of Eating by Charles Spence

💎 On power of brand versus physical assets (you take the factory, give me the trademark)

Or, as John Stuart, chairman of Quaker Oats, said, “If this business were to be split up, I would be glad to take the brands, trademarks, and goodwill, and you could have all the bricks and mortar—and I would fare better than you” (in Dyson et al. 1996, 9).

Excerpt from: Branded Nation: The Marketing of Megachurch. College Inc.. and Museumworld by James Twitchell

💎 On the power of the internet to remove our inhibitions (it doesn’t judge)

The researchers were able to conduct a field experiment into how the introduction of technology changed the content of customer orders. According to the data, online customers chose pizzas that were more complicated and expensive, containing 33 percent more toppings and 6 percent more calories. Instead of just ordering a pepperoni pizza, they chose pies that featured highly unusual toppings, such as “quadruple bacon” or ham, pineapple, and mushroom. (When orders were placed online, bacon sales increased by 20 percent.)

Excerpt from: The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior by Shlomo Benartzi and Jonah Lehrer

💎 On the problem with opinion polls (many opinions are invented on the spot)

One alternative would be an opinion poll. The drawback is that many “opinions” are invented on the spot to satisfy a pollster. Political scientist George Bishop once demonstrated this by asking people whether they favoured repeal of the “Public Affairs Act of 1975.” There was no such act. But thirty percent took the bait and offered an opinion. Bishop found that the less educated were more likely to claim an opinion.

Excerpt from: Head in the Cloud by William Poundstone

💎 On the power of social proof and conformity (devaluing their own opinion)

In 1935 the pioneering social psychologist Mazafer Sherif invited people to take part in an experiment using the autokinetic effect. Participants looked at a point of light in a darkened room and were asked to report whether they thought the light was static or moving, a recreation of a natural phenomenon first observed by astronomers who thought that stars were moving. When participants were asked individually opinion was equally divided; however, when they were put into groups people tended to agree with the majority, even if this meant contradicting what they’d said originally. Later, when asked individually, they continued to subscribe to the group view. In other words, when placed in the context of a group, people will devalue their own opinion in the interest of developing an arbitrary position that is acceptable to the group.

Excerpt from: Consumerology: The Truth about Consumers and the Psychology of Shopping by Philip Graves

💎 On our want (and happiness) for what others want

Females are more attracted to males that have other females close by. Sage grouse hens are more likely to choose to mate with a male if other females have already chosen him. The likelihood of a female fallow deer or sage grouse entering the territory of a male is positively associated with the number of females already present. In a particularly clever experiment, scientists found that placing a stuffed female black grouse in the territory of a male who had failed to mate resulted in an increase in the number of females who enter that luckless male’s territory. Females are influenced by the preferences of other females.

At the human level as well, our automatic, nonconscious mental system uses the preferences of others to help us form our own preferences and even to help us evaluate how happy we are with a choice we have already made.

Excerpt from: 7 Secrets of Persuasion by James Crimmins

💎 On small changes leading to big outcomes (behaviour change)

In 2012 Facebook tweaked the algorithm to manipulate the emotional content appearing in newsfeeds of 689,003 randomly selected, unwitting users. Posts were identified as either positive’ (awesome!) or negative’ (bummer) based on the words used. In one group, Facebook reduced the positive content of news feeds, and in the other, it reduced the negative content. ‘We did this research because we care about the emotional impact of Facebook and the people that use our product,’ Kramer says. ‘We felt that it was important to investigate the common worry that seeing friends post positive content leads to people feeling negative or left out. At the same time, we were concerned that exposure to friends’ negativity might lead people to avoid visiting Facebook.’ Did tinkering with the content change the emotional state of users? Yes, the authors discovered. The exposure led some users to change their own behaviours: the researchers found people who had positive words removed from their feeds made fewer positive posts and more negative ones, and vice versa. It could have been an online version of monkey see, monkey do, or simply a matter of keeping up with the Joneses. ‘The results show emotional contagion’, Adam Kramer and his co-authors write in the academic paper.

Excerpt from: Who Can You Trust?: How Technology Brought Us Together – and Why It Could Drive Us Apart by Rachel Botsman

💎 On too much polling being bad for political parties (just like brands)

As a consequence, government too often moves from active to reactive — from thinking of new ideas to pandering to the latest popular trend. Public opinion, says Nadhim Zahawi, a Tory MP and founder of the polling firm YouGov, ‘used to be like a fine Scotch whisky: sipped and savoured occasionally’. Outside election season, Margaret Thatcher only received monthly updates on what voters thought, if that. Now, governments swig from that bottle every day.

You could argue that this helps them respond instantly to voters’ concerns. Yet all too often it leads to a focus on presentation over policy, and a willingness to back down in the face of noisy opposition (which itself is easier to put together in a more connected and less hierarchical age). As Zahawi says, ‘polls can only tell you how you should communicate what you want to do. They can’t tell you what you should do. Every policy creates a minority of losers, yet always the losers who are best organised and most vocal, particularly in an online arena.’

Excerpt from: The Great Acceleration: How the World is Getting Faster, Faster by Robert Colvile

💎 On more information leading to worse decisions (investment losses)

Why does this matter? There’s solid evidence that experiencing such losses—noticing that our portfolio is losing money—leads to poor choices. In one lab experiment by Richard Thaler, Amos Tversky, Daniel Kahneman, and Alan Schwartz, subjects were far more likely to invest in a bond fund when feedback was given more frequently. Unfortunately, these low-risk bonds also generate lower returns over the long haul. As the scientists noted, “Providing such investors with frequent feedback about their outcomes is likely to encourage their worst tendencies…. More is not always better. The subjects with the most data did the worst in terms of money earned.” Such is the vicious circle of loss aversion, as our strong dislike of losses causes us to lose even more.

Excerpt from: The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior by Shlomo Benartzi and Jonah Lehrer

💎 On claiming to do one thing well versus listing multiple benefits (perceived as less effective)

When an activity claims to satisfy multiple goals it is perceived as less effective than an activity with a single dedicated goal.

Students rated aerobic exercise as a more effective means of achieving a goal when it was described with one health goal (protecting from heart disease) than two goals (protecting from heart disease and maintaining healthy bones).

UNSEEN OPPORTUNITY

To maximise perceived effectiveness, you may need to claim to do just one thing well rather than present a longer list of I multiple benefits.

Excerpt from: The Unseen Mind by Ogilvy Change

💎 On how the group consensus sways other people’s opinions (we like to conform)

Additional experiments, growing out of Asch’s basic method, find large conformity effects for judgments of many different kinds. Consider the following finding. People were asked, ‘Which one of the following do you feel is the most important problem facing our country today?’ Five alternatives were offered: economic recession, educational facilities, subversive activities, mental health, and crime and corruption. Asked privately, a mere 12 percent chose subversive activities. But when exposed to an apparent group consensus unanimously selecting that option, 48 percent of people made the same choice!

Excerpt from: Nudge: Improving Decisions About Health, Wealth and Happiness by Richard Thaler and Cass Sunstein

💎 On how we twist the facts to see what we want to see (personality tests)

Subjects were asked to complete a bogus personality test. The experimenter then gave them all exactly the same sketch of their personalities, which he claimed was based on their test results. When asked about the accuracy of the sketch, 90 per cent of the subjects thought it a very good or excellent description of themselves. People are so good at distorting material to fit their expectations that the identical sketch was thought by each of nearly fifty subjects to apply specifically to him or her.

In addition to trying unconsciously to confirm his or her beliefs, anyone who pays to see a fortune teller will have invested time and money: unless he has just gone for a lark, he will therefore want to feel he has got something out of it (misplaced consistency) and hence will be predisposed to believe what he hears.

Excerpt from: Irrationality: The enemy within by Stuart Sutherland

💎 On the power of imagery (to teach)

We are more likely to remember concepts if they are presented to us as pictures rather than words.

For example, one study of discharged emergency room patients provided half of the participants with text-only instructions to properly care for their wounds, whilst the other half were given both text and cartoon depictions of each step. Three days later, 46% of patients given illustrated instructions demonstrated perfect recall of the prescribed techniques, compared to just 6% in the text-only condition.

Excerpt from: The Unseen Mind by Ogilvy Change

💎 On the damage of rewards (devaluing the task)

At the end of the last chapter, I showed that giving someone a negligible reward (or no reward) for performing an unpleasant act makes the act seem less disagreeable than it really is. One can also ask what is the effect of a large reward on the perception of a pleasant task. The answer is unequivocal: it devalues the task — in the eyes of those performing it. Nursery school children were provided in their playtime with brightly coloured Magic Markers and attractive drawing paper. Those who showed an interest in drawing were subsequently given the same apparatus in the classroom and encouraged to draw. One group was promised a glossy certificate for good drawing, while another was given no reward. Two weeks later the material was again provided and the children were told it was up to them whether they wanted to draw or not. The group previously given the certificate showed a marked decline in interest, while the other group drew as much as they had done in the previous two sessions. Presumably the children thought that drawing could not be of much interest in its own right if a reward was needed to make them engage in it.

Excerpt from: Irrationality: The enemy within by Stuart Sutherland

💎 On estimating how long a phenomenon will last (50% longer)

He made the assumption that the moment when he encountered the Berlin Wall wasn’t special—that it was equally likely to be any moment in the wall’s total lifetime. And if any moment was equally likely, then on average his arrival should have come precisely at the halfway point (since it was 50% likely to fall before halfway and 50% likely to fall after). More generally, unless we know better we can expect to have shown up precisely halfway into the duration of any given phenomenon. And if we assume that were arriving precisely halfway into something’s duration, the best guess we can make for how long it will last into the future becomes obvious: exactly as long as it’s lasted already. Gott saw the Berlin Wall eight years after it was built, so his best guess was that it would stand for eight years more. (It ended up being twenty.)

Excerpt from: Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian and Tom Griffiths

💎 On giving people a licence to indulge (McDonalds salads)

My favorite example of this gap between the behavioral self and the aspirational self has nothing to do with reading, but usefully extends the foodie metaphor beyond doughnuts. In the early to mid-2000s, McDonald’s got more aggressive about promoting healthy options like salad and fruit on its menus. But its revenue growth in those years was due entirely to people eating more greasy fare, like cheeseburgers and fried chicken. New healthy options seemed to lure wannabe dieters into the restaurant, where they would order fast-food basics. In 2010, a group of wordsmithing Duke University researchers called this phenomenon “vicarious goal fulfillment.” Merely considering something that’s “good for you” satisfies a goal and grants license to indulge. People say they want hard news in their social media feeds, but mostly click on funny photos. People say they want to eat greens, but mostly order greasy sandwiches at salad-serving restaurants. People aren’t lying— they do want to be the sort of person who reads news! They do want to see salad options!—but mere proximity to good behavior satisfies their interest in behaving well.

Excerpt from: Hit Makers: The Science of Popularity in an Age of Distraction by Derek Thompson