Psychology – Page 6 – Behavioural Design

Numbers don’t move us, emotions do

Published May 25, 2016 by Anand Damani

Millions of Indians don’t have access to clean water, sanitation, electricity, education, healthcare, banking. The list can go on. The ones with access to all of it, including myself, are aware of the fact that millions go without it everyday. Yet it hardly moves us to do anything about it.

That’s the problem with statistics. It just doesn’t activate our emotions. Paul Slovic, a psychologist at the University of Oregon, has exposed this blind spot in our sympathetic brain. He asked people how much they were willing to donate to various charitable causes. Slovic found that when people were shown a picture of Rokia, a starving Malawian child, with emaciated body and haunting brown eyes, they donated generously to the Save the Children. However, when other people were provided with a list of statistics about starvation throughout Africa – more than 3 million children in Malawi are malnourished, more than 11 million people in Ethiopia need immediate food assistance, and so forth – the donation was 50% lower. At first glance it makes no sense right. When people are informed about the real scope of the problem, they should give more money, not less.

But what happens is that the depressing numbers leave us cold. Our minds can’t comprehend suffering on such a massive scale. That’s why we are riveted when a kid falls in a bore well but turn a blind eye to millions who die every year due to lack of clean drinking water. As Mother Teresa put it, “If I look at the mass, I will never act. If I look at the one, I will.”

Source: Paul Slovic – “If I look at the mass I will never act”: Psychic numbing and genocide – Judgment and Decision Making, vol. 2, no. 2, April 2007, pp. 79-95.

Why we hate losing more than we love gaining

Published May 16, 2016April 19, 2016 by Anand Damani

The tendency to be more sensitive to possible losses than to possible gains is one of the best-supported findings in behavioural science. Nobel laureate Daniel Kahneman and his colleague Amos Tversky were the first to test and document the notion of ‘loss aversion’ – the idea that we are more motivated to avoid losses than we are to acquire gains.

Loss aversion affects a lot of our decisions, in finance, negotiation, persuasion, etc. One consequence of loss aversion is that it makes inexperienced investors to prematurely sell stocks that have gained in value because they simply don’t want to lose what they’ve already gained. (We had also written about it in ‘Why we sell the wrong stocks’) Similarly, the desire to avoid any potential for a loss also makes investors to hold on to stocks that have lost value since the date of purchase. Because selling the stock would mean taking a loss on the investment, which most investors are reluctant to do, a decision that often precedes further stock price decline.

Another popular example of loss aversion is the debacle of New Coke. From 1981 to 1984, Coca-Cola company tested its new and old formulas in taste tests amongst two hundred thousand people across twenty-five cities. 55% of people preferred New Coke versus 45% who preferred the Old Coke. Though most of the tests were blind, in some of the tests people were told which was the New and Old Coke. Under those conditions, preference for New Coke increased by an additional 6%. Why did New Coke fail inspite of such extensive research?

Says Robert Cialdini, Professor of Psychology and Marketing at Arizona State University and advisor to Obama “During taste tests, it was New Coke that was unavailable to people for purchase, when they knew which sample was which. So they showed an especially strong preference for what they couldn’t purchase otherwise. People at the Coca-Cola company might have said, “Oh this means that when people know that they’re getting something new, their desire for it will shoot up.” But, in fact, what the 6% really meant was that when people know what it is they can’t buy, their desire for it will shoot up. Later when the company replaced Old Coke for New Coke, it was Old Coke that people couldn’t have, and it became the favorite.”

For people losing Old Coke was more valuable than gaining New Coke. What this means is that to make messages more persuasive they should be framed to avoid losses more than acquire gains. So a message like ‘Shop till you drop at 30% discount’ could be more persuasive if framed as, ‘Don’t miss the chance to shop at 30% discount’. The latter implies that the deal is scarce in some way (e.g. limited time) and that people could be losing the opportunity to get a good deal.

Sources: Daniel Kahneman and Nathan Novemsky – The Boundaries of Loss Aversion – Journal of Marketing Research 42:119-128 (2005)

Ziv Carmon and Dan Ariely – Focusing on the Forgone: How value can appear so different to buyers and sellers – Journal of Consumer Research (2000)

G.R. Shell – Bargaining for advantage (1999)

Need a favor? Ask your opponent

Published April 12, 2016 by Anand Damani

Most of us feel shy asking for favors. And if it comes to asking for a favor from an opponent or someone who doesn’t view us in a particularly favorable light, we see it as totally objectionable, lest we get rejected or disliked. But behavioural science tells us that such hesitation is unwarranted.

In a study by behavioural researchers Jon Jecker and David Landy, participants won some money from the experimenter in a contest. Afterward, one group of participants was approached by the experimenter, who asked them if they’d be willing to give back the money because the experimenter was using his own money and had little left. Almost all agreed. The other group of participants was not approached with any request. All the participants were then anonymously surveyed about how much they liked the experimenter. Jecker and Landy found that those who were asked to do the favor rated the experimenter more favorably than did those who were not asked to give the money back.

Robert Cialdini, Professor of Psychology and Marketing at Arizona State University says, “People are strongly motivated to change their attitudes in ways that are consistent with their behavior.”

The participants who returned the money back must have said to themselves, “Why did I go out of my way to help this experimenter I don’t even know that well? He seems like a good person”, when asked how much they liked the experimenter.

Often we are in need of some kind of help from a colleague or neighbor who for whatever reason doesn’t view us in particularly favorable light. We might hesitate to ask for the favor because we’re afraid of rejection or dislike. So we put off asking for a favor, whereas doing it would be a brave thing to do and more importantly, as the research indicates, is likely to work. Try it. You don’t have much to lose anyways. At most, the person won’t do you the favor. But if the person does it, he/she will counter-intuitively start liking you.

Source: Jon Jecker and David Landy – Liking a person as a function of doing him a favour – Human relations Volume 22, no. 4, pp 371-78

All’s well that begins well

Published April 5, 2016 by Anand Damani

Any event that has a good ending is good even if some things went wrong along the way. That’s why ‘All’s well that ends well’. But ‘All’s well that begins well’ can be true too. Especially in the case of customer loyalty programs. Every retailer looks to increasing customer loyalty by offering incentive programs like frequent flyer programs or a club membership program. But amongst so many kind of programs which ones manage to perform better?

Behavioural researchers Joseph Nunes and Xavier Dreze conducted a research to find out. They handed loyalty cards to 300 customers of a local car wash. Every time the car was washed the loyalty card was stamped. There were two types of cards: one required 8 stamps to receive a free car wash and the other required 10 stamps, but 2 stamps were already affixed to the loyalty card. So both cards required 8 washes to get the free car wash.

After several months of the researched program, the researchers found only 19% of customers in the 8-stamp group made enough visits to claim their free wash compared to 34% of the 10-stamp, All’s-well-that-begins-well group. The latter group also took less time to complete their 8^th wash, taking an average of 2.9 fewer days between car washes.

According to Nunes and Dreze, reframing the program as one that’s been started but not completed, rather than one that’s not yet begun, motivated people to complete it. Additional findings from research suggested that the closer people got to complete a goal, the more effort they exerted to achieve that goal. Data revealed that the amount of time between visits decreased by about half a day on average with every additional car wash that was purchased.

Now we know when to ask people for help on a project. One that’s already underway but incomplete, rather than one that has to start from scratch, is likely to be the project that gets help. So get started, help will be on its way.

Source: Joseph Nunes and Xavier Dreze: The endowed progress effort: How artificial advancement increases effort: Journal of consumer research 32: 504-12.

Post-it Notes can be really sticky

Published March 9, 2016 by Anand Damani

Behavioural scientist Randy Garner has done an intriguing piece of research that demonstrates the power of handwritten Post-it Notes.

He sent out surveys to people with a request to complete them. The survey was accompanied by either (a) a handwritten Post-it Note requesting completion of the survey, which was attached to a cover letter; (b) a similar handwritten message on the cover letter; or (c) the cover letter and survey alone. More than 75% of people who received the survey with a Post-it Note filled it out and returned it, compared to 48% of the second group and 36% of the third group.

Garner wondered whether it was due to the attention-grabbing neon colored sticky notes. So he sent out a new batch of surveys. A third of the surveys came with a Post-it Note with a handwritten request, a third came with a blank Post-it Note, and a third had no Post-it Note. The handwritten Post-it Note got a response rate of 69% compared to 49% for the blank Post-it Note and 34% for no Post-it Note.

Why did it happen? Although handwriting a Post-it Note is so simple and seemingly insignificant thing to do, people recognize the extra effort and personal touch and feel the need to reciprocate this personal touch by agreeing to the request.

Garner found that the handwritten Post-it Note did more than just persuade people to respond to the survey: those who received the survey with the handwritten Post-it Note returned it more promptly and gave more detailed answers to the questions. In fact the handwritten Post-it Notes that were more personal with initials and a ‘Thank you’ had response rates higher than the rest of the handwritten Post-it Notes.

Using Post-it Notes can not only earn a profit for 3M, but for you too.

Source: Randy Garner – Post-it Note Persuasion: A Sticky Influence – Journal of Consumer Psychology (2005)

There’s at least one benefit of having a common name

Published February 23, 2016 by Anand Damani

Everyone I know who is told that his/her name is common gets peeved, including myself. But hey we found one huge benefit of having a common name.

In a study by researcher Randy Garner surveys were sent by mail to complete strangers. Accompanying the survey was a request to complete and return it to the person whose name was either similar or dissimilar to the name of the survey recipient. So a person whose name was Robert Greer got the survey from Bob Gregar or a woman named Cynthia Johnston got the survey from Cindy Johanson, in the similar name group. The dissimilar name group of course got surveys from dissimilar-sounding names. Those who received the survey from someone with a similar-sounding name were twice as likely to fill out the surveys than names that were dissimilar (56% compared to 30%).

Findings such as this one show the power and subtlety of similarity as a cue that people use to decide whom to help. That’s why pointing out similarities in any domain, including names, birth dates, religion, hometowns, schools, alma mater, etc. in discussions with any person before making your request or presentation could get you a favorable response.

Alternatively, if you’re designing a program/project/initiative/product for a particular client, you can harness the power of people’s natural tendency to be attracted to things that remind them of themselves in the name, title or label that you give it.

Source: Randy Garner – What’s in a Name? Persuasion Perhaps – Journal of Consumer Psychology (2005)

Mirroring others behaviour can get you likes

Published January 19, 2016 by Anand Damani

Often during a meeting or a negotiation we subconsciously mirror our colleagues’ or negotiators’ posture. The typical response is to change our posture, as if there were something wrong with being influenced by the other. However the following research suggests the exact opposite: Mirroring behaviour results in better outcomes for both.

Researcher William Maddux and colleagues conducted an experiment wherein MBA students were instructed to subtly mirror their partner during negotiation (e.g. lean back if the other person does) or not asked to mirror their partner. When one party was instructed to mirror the other, the two parties reached a deal 67% of the time. When they weren’t told to mirror the other, the parties reached a deal only 12.5% of the time.

Based on additional data from the research, they concluded that mirroring behaviour led to increased trust, and that increased trust typically led one negotiator to feel comfortable disclosing details that were ultimately necessary to break a stalemate and create a win-win situation for both parties.

Another research by Rick van Baaren and colleagues found that waiters at a restaurant increased their tip size by nearly 70% simply by matching their customers’ verbalizations, repeating back word for word the customer’s order, as opposed to saying “okay” or merely nodding.

Social psychologists Tanya Chartrand and John Barg say that matching behaviour of others creates feelings of liking and strengthens bonds between two people. It makes us say “yes” and do nice things for people we like.

At the same time, you don’t want your interaction to come across as mocking the other person. So the key is subtlety.

Sources: William Maddux, Elizabeth Mullen and Adam Galinsky – Chameleons bake bigger pies and take bigger pieces: Strategic behavioral mimicry facilitates negotiations outcomes – Journal of Experimental Social Psychology 44, no. 2: 461-68 (March 2008)

Rick van Baaren, Rob Holland, Brejge Steenart, Ad van Knippenberg – Mimicry for money: Behavioral consequences of Imitation – Journal of Experimental Social Psychology 39, no. 4:393-98 (July 2003)

Tanya Chatrand and John Bargh – The chameleon effect: The perception-behavior link and social interaction – Journal of Personality and Social Psychology 76, no. 6: 893-910 (June 1999)

Smoking – the toughest habit can be broken

Published July 14, 2015July 14, 2015 by Anand Damani

We’re non-smokers, but we empathize with those who want to quit after years of smoking. It’s not easy. People try lots of things to quit smoking – nicotine patches, cold turkey, replacing the cigarette with something to keep them busy, avoiding the spots where smokers congregate, making new year resolutions, promising their kids/wives/girlfriends, what not. Few succeed, most fail.

We’ve chanced upon something that has proved to be more successful than any other way to quit smoking. CARES – Committed Action to Reduce and End Smoking – is a savings program offered by the Green Bank of Caraga in Mindanao, Philippines. Here’s how the savings program works. The smoker opens an account with a minimum balance of $1. For 6 months, the smoker deposits the amount of money he (includes ‘she’) would otherwise spend on cigarettes into the account. After 6 months, the client takes a urine test to confirm that he has not smoked. If he passes the test, he gets his money back. If he fails the test, the account is closed and the money is donated to charity.

Results of this program have been evaluated by MIT’s Poverty Action Lab and look better than other anti-smoking tactics. Opening an account makes those who want to quit 53% more likely to achieve their goal. In a study done by Xavier Gine, Dean Karlan and Jonathan Zinman, those who were offered CARES, including those who turned it down, were about 45% more likely to pass the nicotine test than the control group. Would smokers relapse once the 6 months were over and the pressure was off? After another six months of the 6-month program, researchers found that customers who took up CARES and even those who were offered but didn’t enroll, did markedly better than the control group.

If you wish to quit smoking in the same manner by depositing money with us, email us at anand@brief-case.co Seriously, no kidding. We’ll do a test after around 6 months. We can agree to donate to a charity you don’t like. So that adds to your motivation to quit. And, if you want to commit to any other self-improvement, we’re open provided it can be verified whether you have achieved it or not.

Source: Xavier Gine, Dean Karlan, Jonathan Zinman – Put your money where your butt is: A commitment contract for smoking cessation – American Economic Journal: Applied Economics 2(4):1-26 (2010)

Women are better stock investors than men

Published February 24, 2015February 24, 2015 by Anand Damani

Most of us including women, stereotype genders. We tend to think women are better at home in the kitchen while men are better at earning money. While some stereotypes are true, this one about whose the better investor is a counter-intuitive one.

Terry Odean, a University of California professor, has studied stock picking by gender for more than two decades. A seven-year study found single female investors outperformed single men by 2.3 percent, investment groups with females outperformed male counterparts by 4.6 percent. Why? The short answer is overconfidence. Men have more knowledge about investment, but it makes them overconfident and take undue risks. Women on the other hand, take fewer undue risks, rely on simple heuristics such as ‘buy what you know’ and ‘diversify equally’, which have been tested to give better returns.

Additionally, men hold onto their losers a lot longer than women. They’re sure the stock will come roaring back — even as it sinks. Men with our macho-ness don’t want to admit we’re wrong. So we tend to hold on to loser stocks. Women are more loss averse than men, more emotionally unattached and are far quicker to unload losers.

Though science proves women make for better investors, men will likely continue to think otherwise. Men will be men.

Sources: B. M. Barber and T. Odean – Boys will be boys: Gender, overconfidence and common stock investment – The Quarterly Journal of Economics 1, 261-92 (2001)

Ortmann, G. Gigerenzer, B. Borges and D. G. Goldstein – The recognition heuristic: A fast and frugal way to investment choice? – C. R. Plott and V. L. Smith (Eds.) – Handbook of experimental economics results: Vol. 1 (pp. 993-1003): Amsterdam: North-Holland.

The smartest thing on the idiot box

Published January 19, 2015January 19, 2015 by Anand Damani

Behavioural Design is on National Geographic Channel.

Behavioural scientist Daniel Pink is doing a show called Crowd Control. Its a series of experiments that use behavioural science to solve public problems like how to get kids to not pee in the pool, how to get people to follow instructions in emergency flight landings, etc.

It’s on National Geographic Channel on Mon-Thur 10pm India time.

Because it’s a TV show, they’ve had to factor in the entertainment quotient. That’s why few of the solutions are not scalable. Nevertheless they make for some of the smartest ideas you’ll see on TV.

See the edited video clips of the experiments right now here.

Follow Behavioural Design