Excerpts Archives - Page 6 of 24

💎 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

💎 Homer Simpson on present preference bias (I don’t envy that guy)

That’s a problem for future Homer. Man, I don’t envy that guy.

-HOMER SIMPSON

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

💎 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

💎 Economic forecasting and astrology

The only function of economic forecasting is to make astrology look respectable.
– JOHN KENNETH GALBRAITH

Excerpt from: Uncharted: How to Map the Future by Margaret Heffernan

💎 Mistakes (you need to make them)

BISHOP MAGEE ‘The man who makes no mistakes does not usually make anything.’

Excerpt from: The Art of Looking Sideways by Alan Fletcher

💎 Checklist for evaluating creative strategy (11 steps)

Checklist for evaluating creative

1. Come prepared
2. Expect to be surprised maybe even made a little nervous
3. React to the idea as a whole
4. Add what’s important and incremental
5. Make sure it’s on strategy, not on checklist
6. If it doesn’t connect emotionally, it doesn’t connect
7. Remember what the work is trying to accomplish
8. Don’t just talk about what’s not working for you
9. See problems? Don’t offer solutions, explain the problem
10. Remember you don’t have to find something wrong
11. A creative idea needs creative direction not group cons

Excerpt from: Strategy Scrapbook by Alex Morris

💎 Our picture memory is superior to our verbal memory (and our memory of vivid imagery is greater than that of more routine images)

In 1973, Standing conducted a range of experiments exploring human memory. The participants were shown pictures or words and instructed to pay attention to them and try to memorize them for a test on memory. Each picture or word was shown once, for five seconds.

The words had been randomly selected from the Merriam-Webster dictionary and were printed on 35mm slides – words like ‘salad’, ‘cotton’, reduce’, ‘camouflage’ ‘ton’.

The pictures were taken from 1,000 snapshots – most of them from holidays – beaches, palm trees, sunsets – volunteered by the students and faculty at McMaster University in Ontario, Canada, where Standing taught at the time. But some of the pictures were more vivid – a crashed plane, for instance, or a dog holding a pipe. But remember this was the seventies – all dogs smoked pipes back then.

Two days later the participants were shown a series of two snapshots or two words at a time, one from the stack of snapshots they had seen before and one new, and were asked which one looked more familiar.

The experiment showed that our picture memory is superior to our verbal memory. When the learning set is 1,000 words selected from the dictionary above, we remember 62 per cent of them, while 77 per cent of the 1,000 selected snapshots were remembered. The bigger the learning set, the smaller the recognition rate. So, for instance, if the learning set for pictures were increased to 10,000, the recognition rate dropped to 66 per cent. However, we remember snapshots better than we do words. That may be why you might be better at remembering faces than names. So, if you are introduced to Penelope, it might help you remember her name if you picture Penelope Cruz standing next to her.

In addition, if more vivid pictures were presented, rather than the routine snapshots, recognition jumped to 88 per cent for 1,000 pictures.

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

💎 Inhibiting desire can backfire (why breaking habits is hard)

Psychologist Daniel Wegner and his colleagues devised an experiment to demonstrate the ironic effect of inhibiting our desires. Participants were instructed in a simple task-not thinking of a white bear. Who spends much time thinking of white bears, anyway? Participants sat alone in a lab room for five minutes and rang a bell every time they failed to suppress this thought. On average, they rang the bell about five times, almost once per minute. No surprise that our thoughts wander, even to forbidden topics, when we are alone and bored. What is interesting is what happened when the same participants later sat for five minutes trying to think of a white bear. After the suppression task, they rang the bell almost eight times. In contrast, participants instructed to try to think of a white bear for five minutes, but without the initial task of not doing so, rang the bell fewer than five times. It was as if the act of trying to suppress a thought gave it a special energy to emerge later. After the participants tried not to think about white bears, thoughts of them returned again and again. When rating their experience, participants who had initially suppressed thoughts of white bears reported feeling preoccupied with them.

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

💎 Why people often think they’re the hero (moral superiority)

Everyone who’s psychologically normal thinks they’re the hero. Moral superiority is thought to be a ʻuniquely strong and prevalent form of positive illusion’. Maintaining a positive moral self-image’ doesn’t only offer psychological and social benefits, it’s actually been found to improve our physical health. Even murderers and domestic abusers tend to consider themselves morally justified, often the victims of intolerable provocation. When researchers tested prisoners on their hero-maker biases, they found them to be largely intact. The inmates considered themselves above average on a range of pro-social characteristics, including kindness and morality. The exception was law-abidingness. There, sitting in prison, serving sentences precisely because they’d made serious contraventions of the law, they were only willing to concede that, on law-abidingness, they scored about average.

Excerpt from: The Science of Storytelling by Will Storr

💎 Even in an era of efficiency, there’s a role for extravagance in advance (advertising works)

John Kay, an economist at Oxford University, argues that advertising doesn’t work because of explicit messages. He suggests that one context is particularly important that of waste. By waste he means spending more on adverts than is necessary to functionally communicate the explicit message. That could be a 90-second ad, acres of white space on double-page spread or extravagant production values.

Advertising known to be expensive signals the volume of the resources available to the advertiser. As Kay says in his landmark paper:

The advertiser has either persuaded lots or people to buy his product already, a good sign, or has persuaded someone to lend him lots of money to finance the campaign.

Advertising works, not despite its perceived wastage, but because of it.

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

💎 Our tendency to set different burdens of proof according to whether evidence agrees with our existing viewpoint or not (Must I believe this?)

As psychologist Thomas Gilovich noted, “When examining evidence relevant to a given belief, people are inclined to see what they expect to see, and conclude what they expect to conclude… For desired conclusions … we ask ourselves, ‘Can I believe this?, but for unpalatable conclusions we ask, “Must I believe this?””

Excerpt from: Catalyst by Jonah Berger

💎 Exposure to different views doesn’t make people more moderate (they become more extreme)

To test this possibility, Bail set up a clever experiment. He recruited more than 1,500 Twitter users and had them low accounts that exposed them to opposing viewpoints. For a month they saw messages and information from elected officials, organizations, and opinion leaders from the other side. A liberal might see tweets from Fox News or Donald Trump. A conservative might see posts from Hillary Clinton or Planned Parenthood.

It was a digital version of reaching across the aisle. A simple intervention that could have big effects for social policy.

Then, at the end of the month, Bail and his team measured users’ attitudes. How they felt about various political and social issues. Things like whether government regulation is beneficial, whether homosexuality should be accepted by society, and whether the best way to ensure peace is through military strength.

It was a huge undertaking. Years of preparation and thousands of hours of work. The hope was that, as thousands of pundits, columnists, and other talking heads have argued, connecting with the other side would bring people closer together.
But that’s not what happened. Exposure to the other side didn’t make people more moderate.

In fact, just the opposite. Exposure to opposing views did change minds, but in the opposite direction. Rather than becoming more liberal, Republicans exposed to liberal information became more conservative, developing more extreme attitudes toward social policies. Liberals showed similar effects.

Excerpt from: Catalyst by Jonah Berger

💎 Approaches for coming up with a big ideas (David Ogilvy)

“Stuff your conscious mind with information, then unhook your rational thought process. You can help this process by going for a long walk, or taking a hot bath, or drinking half a pint of claret. Suddenly, if the telephone line from your unconscious is open, a big idea wells up within you.’

David Ogilvy, adman

Excerpt from How to Have Great Ideas: A Guide to Creative Thinking and Problem Solving by John Ingledew

💎 Why psychologists believe that focus groups are far less insightful than some marketers think (Head cannot look into Gut)

‘The heart has its reasons,’ Blaise Pascal wrote more than three centuries ago, ‘which reason knows nothing of’. Sot with the conscious and unconscious minds. Head cannot look into Gut and so it has no idea how Gut assembles its judgments, which is why psychologists believe that focus groups are far less insightful than some marketers think. If you put people together in a room, show them a car commercial, and ask them how they feel about the car, you will get clear answers. ‘I don’t care for it,’ a man may say. Fine. Why not? He frowns. ‘Um, the styling on the front is ugly. And I want a more powerful engine.’ That looks like good insight, just the sort of thing a company can use to design and market its products. But it’s not. This man’s snap judgment – ‘I don’t like that car’ – came from Gut. But the interviewer is talking to Head. And Head doesn’t have a clue why Gut doesn’t like the car. So Head rationalizes. It looks at the conclusion and cobbles together an explanation that is both plausible and quite possibly, wrong.

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

💎 We often selectively interpret evidence to fit with our prior beliefs (and is used to further cement beliefs)

In 1979 – when capital punishment was a top issue in the United States – American researchers brought together equal numbers of supporters and opponents of the death penalty. The strength of their views was tested. Then they were asked to read a carefully balanced essay that presented evidence that capital punishment deters crime and evidence that it does not. The researchers then retested people’s opinions and discovered that they had only gotten stronger. They had absorbed the evidence that confirmed their views, ignored the rest, and left the experiment even more convinced that they were right and those who disagreed were wrong.

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

💎 Consumers systematically prefer a large percentage to a small percentage (bonus pack vs. price discount)

A price discount of 20% is economically equal to a volume increase of 25%. Chen et al. (2012) discovered that consumers err when calculating percentages and tend to ignore the base value the percentage refers to – an effect coined “base value neglect.”

The researchers observed that consumers systematically prefer a large percentage to a small percentage. This means consumers prefer a bonus pack to an economically identical price discount when both are expressed as percentages. Vice versa, consumers also prefer a size decrease to price increase when presented as a percentage.

In a field study, Chen et al. (2012) sold a hand lotion either at a 35% price discount or as bonus pack with 50% more content in a small retail store. After 16 weeks of promotion, the researchers observed that the bonus pack promotion sold 81% more units per day than the price discount promotion.

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