Sources
https://en.wikipedia.org/wiki/Loss_aversion
https://www.scientificamerican.com/article/what-is-loss-aversion/
https://www.behavioraleconomics.com/mini-encyclopedia-of-be/sunk-cost-fallacy/
https://en.wikipedia.org/wiki/Decoy_effect
https://www.jeremysaid.com/blog/how-to-use-the-decoy-effect/
https://www.scientificamerican.com/article/what-is-loss-aversion/
https://www.behavioraleconomics.com/mini-encyclopedia-of-be/sunk-cost-fallacy/
https://en.wikipedia.org/wiki/Decoy_effect
https://www.jeremysaid.com/blog/how-to-use-the-decoy-effect/
Script
Ey, whatcha want!? Well, exactly- today’s topic is how to control what others want.
SAICOLOGY INTRO
Welcome all to Sai-Cology, with me, Saira. Let’s get into it!
Risky Business
We hate to lose. But not just in a game or competition. We hate to lose money or property. Think of it like this - someone gives you $50-- would you rather keep 20 or lose 30? If someone offered to give you $20 after a coin toss, but you’d have to give $20 if you lost, you probably won’t say yes unless they’re offering at least double of what you would possibly lose. People get more satisfaction from not losing than from winning. Loss Aversion is in part thanks to the endowment effect - that things we own have higher value to us.
It’s also based in our expectations - we are more upset when we expect to buy something for a certain price and its no longer available than if we had no expectations at all. The stigma and associations with the possibility of losing are much harder on our brains and emotions than the effects of winning. Similar to loss aversion is risk and regret aversion - where we avoid taking large risks and making decisions we may regret. Another related affect is the sunk cost fallacy where we continue to behave or act on things that are not great just because of a previously investment of time, money or effort. It’s all about avoiding loss and sticking with the status quo-- we are change averse beings. Anyways, how to use this to control what others want-- well in economics and business it’s used all the time to manipulate consumers. Now you can use it too - if something is going to come at a loss to your subject, you need to frame it to avoid it being a loss at all costs. Make things seem as if they are gaining something worth twice as much as any possible loss. Or start off with a higher, more extreme scenario then reduce it -- much like stores overpriced then put items on sale or clearance. Now, let’s talk about how to make people choose the option you want them to.
Apples and Oranges
Here are 3 options-- choose one in the poll in the upper right corner. The Decoy Effect. Companies or teams can offer us 3 options and by the relationship between the comparisons, direct us to choose the option they want. With the Apple watch-- they want you to buy the middle one so they introduce the luxury high end one, so the standard seems like a better deal than if it were the most expensive one. With the popcorn, you will more likely buy the large since it’s only 50 cents cheaper than the medium so it seems like a better deal than if there were only the large and small options. Finally with both the apples and business men - by having two similar options and one that is slightly “better” (younger) than the other, you’re more likely to choose the “better” option of the two similar ones than the one who is different, since you have something to compare it to. You can use this to guide people to make a certain choice by providing similar but slightly worse options. Of course some people will have personal preferences that will differ, but it will statistically, you’ll get more responses that are in your favor, especially if you don’t have any other information besides the images or prices.
If you want to read more about how any of these things work, check the links below for my sources and other cool psychology resources and shows. As always, be sure to like, subscribe and hit that bell so you won’t miss future episodes. Next week, we’ll be talking about Cults! SO FUN. In the meantime, check out past episodes up in the cards and comment any thoughts, questions or experiences you have. See you next time, and behave yourself.
SAICOLOGY INTRO
Welcome all to Sai-Cology, with me, Saira. Let’s get into it!
Risky Business
We hate to lose. But not just in a game or competition. We hate to lose money or property. Think of it like this - someone gives you $50-- would you rather keep 20 or lose 30? If someone offered to give you $20 after a coin toss, but you’d have to give $20 if you lost, you probably won’t say yes unless they’re offering at least double of what you would possibly lose. People get more satisfaction from not losing than from winning. Loss Aversion is in part thanks to the endowment effect - that things we own have higher value to us.
It’s also based in our expectations - we are more upset when we expect to buy something for a certain price and its no longer available than if we had no expectations at all. The stigma and associations with the possibility of losing are much harder on our brains and emotions than the effects of winning. Similar to loss aversion is risk and regret aversion - where we avoid taking large risks and making decisions we may regret. Another related affect is the sunk cost fallacy where we continue to behave or act on things that are not great just because of a previously investment of time, money or effort. It’s all about avoiding loss and sticking with the status quo-- we are change averse beings. Anyways, how to use this to control what others want-- well in economics and business it’s used all the time to manipulate consumers. Now you can use it too - if something is going to come at a loss to your subject, you need to frame it to avoid it being a loss at all costs. Make things seem as if they are gaining something worth twice as much as any possible loss. Or start off with a higher, more extreme scenario then reduce it -- much like stores overpriced then put items on sale or clearance. Now, let’s talk about how to make people choose the option you want them to.
Apples and Oranges
Here are 3 options-- choose one in the poll in the upper right corner. The Decoy Effect. Companies or teams can offer us 3 options and by the relationship between the comparisons, direct us to choose the option they want. With the Apple watch-- they want you to buy the middle one so they introduce the luxury high end one, so the standard seems like a better deal than if it were the most expensive one. With the popcorn, you will more likely buy the large since it’s only 50 cents cheaper than the medium so it seems like a better deal than if there were only the large and small options. Finally with both the apples and business men - by having two similar options and one that is slightly “better” (younger) than the other, you’re more likely to choose the “better” option of the two similar ones than the one who is different, since you have something to compare it to. You can use this to guide people to make a certain choice by providing similar but slightly worse options. Of course some people will have personal preferences that will differ, but it will statistically, you’ll get more responses that are in your favor, especially if you don’t have any other information besides the images or prices.
If you want to read more about how any of these things work, check the links below for my sources and other cool psychology resources and shows. As always, be sure to like, subscribe and hit that bell so you won’t miss future episodes. Next week, we’ll be talking about Cults! SO FUN. In the meantime, check out past episodes up in the cards and comment any thoughts, questions or experiences you have. See you next time, and behave yourself.