tag:theconversation.com,2011:/uk/topics/consumer-psychology-44992/articlesConsumer psychology – The Conversation2023-08-23T03:30:58Ztag:theconversation.com,2011:article/2111172023-08-23T03:30:58Z2023-08-23T03:30:58ZJunk fees and drip pricing: underhanded tactics we hate yet still fall for<figure><img src="https://images.theconversation.com/files/543648/original/file-20230821-19-qtirft.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5472%2C2776&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>You see a fantastic offer, like a hotel room. You decide to book. Then it turns out there is a service fee. Then a cleaning fee. Then a few other extra costs. By the time you pay the final price, it is no longer the fantastic offer you thought. </p>
<p>Welcome to the world of drip pricing – the practice of advertising something at an attractive headline price and then, once you’ve committed to the purchase process, hitting you with unavoidable extra fees that are incrementally disclosed, or “dripped”. </p>
<p>Drip pricing – a type of “junk fee” – is notorious in event and travel ticketing, and is creeping into other areas, such as movie tickets. My daughter, for example, was surprised to find her ticket to the Barbie movie had a “booking fee”, increasing the cost of her ticket by 13%.</p>
<p>It seems like such an annoying trick that you may wonder why sellers do it. The reason is because it works, due to two fundamental cognitive biases: the way we value the present over the future; and the way we hate losses more than we love gains. </p>
<h2>Present bias preference: why starting over feels too costly</h2>
<p>In the case of booking that hotel room, you could abandon the transaction and look for something cheaper once the extra charges become apparent. But there’s a good chance you won’t, due to the effort and time involved.</p>
<p>This is where the trap lies.</p>
<p>Resistance to the idea of starting the search all over again is not simply a matter of laziness or indecision. There’s a profound psychological mechanism at play here, called a present-bias preference – that we value things immediately in front of us more than things more distant in the future.</p>
<p>In their seminal 1999 paper, <a href="https://doi.org/10.1257/aer.89.1.103">Doing it now or later</a>, economists Mathew Rabin and Ted O'Donoghue define present-biased preference as “the human tendency to grab immediate rewards and to avoid immediate costs”. </p>
<p>They give the example of choosing between doing seven hours of unpleasant activity on April 1 or eight hours two weeks later. If asked about this a few months beforehand, most people will choose the earlier option. “But come April 1, given the same choice, most of us are apt to put off work till April 15.”</p>
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<img alt="alt" src="https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/544131/original/file-20230823-19-9qj7ef.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A present-biased preference is the human tendency to grab immediate rewards and to avoid immediate costs.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<p>In simple terms, the inconvenience and effort of doing something “right now” often feels disproportionately large. </p>
<p>Drip pricing exploits this cognitive bias by getting you to make a decision and commit to the transaction process. When you’re far into a complicated booking process and extra prices get added, starting all over again feels like a burden. </p>
<p>Often enough, this means you’ll settle for the higher-priced hotel room.</p>
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Read more:
<a href="https://theconversation.com/why-telling-people-they-could-get-sick-in-the-future-wont-persuade-them-to-be-healthy-now-90456">Why telling people they could get sick in the future won't persuade them to be healthy now</a>
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</em>
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<h2>Loss aversion: buying more expensive tickets</h2>
<p>Beyond the challenge of starting over, there’s another subtle force at work when it comes to our spending decisions. Drip pricing doesn’t just capitalise on our desire for immediate rewards; it also plays on our innate fear of losing out.</p>
<p>This second psychological phenomenon that drip pricing exploits is known as loss aversion – that we feel more pain from losing something than pleasure from gaining the same thing. </p>
<p>The concept of loss aversion was first outlined by economists Daniel Kahneman and Amos Tversky in <a href="https://www.jstor.org/stable/1914185">a 1979 paper</a> that is the third most-cited article in economics. </p>
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<figure class="align-center ">
<img alt="A graphic representation of loss aversion. The pain from losing a good or service will be greater than the pleasure from gaining the same good or service." src="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=497&fit=crop&dpr=1 600w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=497&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=497&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=624&fit=crop&dpr=1 754w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=624&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/543635/original/file-20230821-25-mca6ku.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=624&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">How economists Daniel Kahneman and Amos Tversky graphically represented loss aversion. The pain from losing a good or service is greater than the pleasure from gaining the same good or service.</span>
<span class="attribution"><span class="source">Daniel Kahneman and Amos Tversky, Prospect Theory: An Analysis of Decision under Risk, Econometrica, Vol. 47, No. 2</span></span>
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<p>Drip pricing exploits this tendency, by dragging us away from more “rational” choices. </p>
<p>Imagine you’re booking tickets for a show. Initially attracted by the observed headline price, you are now presented with different seating categories. Seeing the “VIP” are within your budget, you decide to splurge.</p>
<p>But then, during the checkout process, the drip of extra costs begins. You realise you could have opted for lower-category seats and stayed within your budget. But by this stage you’ve already changed your expectation and imagined yourself enjoying the show from those nice seats.</p>
<p>Going back and booking cheaper seats will feel like a loss.</p>
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Read more:
<a href="https://theconversation.com/explainer-what-is-loss-aversion-and-is-it-real-101389">Explainer: what is loss aversion and is it real?</a>
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<h2>Do consumers need protection?</h2>
<p>Empirical evidence supports the above theoretical predictions about the impact of drop pricing on consumers. </p>
<p><a href="https://doi.org/10.1002/mar.21426">A 2020 study</a> quantified how much consumers dislike the lack of transparency in drip pricing (based on tracking the reactions of 225 undergraduates using fictional airline and hotel-booking websites). The authors liken the practice to the “taximeter effect” – the discomfort consumers feel watching costs accumulate.</p>
<p>But drip pricing’s effectiveness from a seller’s perspective is undeniable. A <a href="https://doi.org/10.1016/j.jebo.2020.04.007">experimental study</a> published in 2020 found drip pricing generates higher profits while lowering the “consumer surplus” (the benefit derived from buying a product or service). A <a href="https://doi.org/10.1287/mksc.2020.1261">2021 analysis</a> of data from StubHub, a US website for reselling tickets, calculated drip pricing increased revenue by 20%.</p>
<p>Which is why the tactic remains attractive to businesses despite customers disliking it.</p>
<p>Buyers would benefit from a ban of drip pricing. Many countries are taking steps to protect consumers from drip pricing. </p>
<p>The UK government, for example, announced a <a href="https://www.theguardian.com/business/2023/aug/21/growth-of-airlines-add-on-fees-sparks-calls-for-price-reforms">review of drip pricing</a> in June, with Prime Minister Rishi Sunak flagging the possibility of measures to curb the practice. The US government is also considering <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/06/15/president-biden-recognizes-actions-by-private-sector-ticketing-and-travel-companies-to-eliminate-hidden-junk-fees-and-provide-millions-of-customers-with-transparent-pricing/">new regulations</a>, with President Joe Biden denouncing “junk fees” in his <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/02/07/remarks-of-president-joe-biden-state-of-the-union-address-as-prepared-for-delivery/">2023 State of the Union address</a>. Proposed changes include requiring airlines and online booking services to disclose the full ticket price upfront, inclusive of baggage and other fees.</p>
<p>The effectiveness of measures, however, is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4430453">still being debated</a>.</p>
<p>In the meantime, your principal protection is making a more informed decision, by understanding why the tactic works. Bargains may attract you, but you can learn to not fall for hidden costs and align your choices with your budget and values.</p><img src="https://counter.theconversation.com/content/211117/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ralf Steinhauser does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We are easy prey for drip pricing, the practice of incrementally disclosing unavoidable additional fees, squeezing our wallets and feeling unfair.Ralf Steinhauser, Senior Research Fellow, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2034872023-06-02T12:41:24Z2023-06-02T12:41:24ZThe allure of the ad-lib: New research identifies why people prefer spontaneity in entertainment<figure><img src="https://images.theconversation.com/files/528844/original/file-20230529-23-47rygd.jpg?ixlib=rb-1.1.0&rect=473%2C143%2C4604%2C3607&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What makes improvised stage patter more appealing than a canned script?</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/silhouette-of-woman-with-microphone-singing-on-royalty-free-image/1160645050">FangXiaNuo/E+ via Getty Images</a></span></figcaption></figure><p><em>The <a href="https://theconversation.com/us/topics/research-brief-83231">Research Brief</a> is a short take about interesting academic work.</em></p>
<h2>The big idea</h2>
<p>Audiences love to see athletes and entertainers behaving spontaneously, <a href="https://doi.org/10.1093/jcr/ucac060">according to our recent research</a>, because ad-libbed lines, spectacular catches, improvised set lists and the like make performers seem more authentic and genuine.</p>
<p>We observed a preference for spontaneity in entertainment across several studies. First, we examined dozens of Buzzfeed articles from the past several years about spontaneity in film and TV, like “<a href="https://www.buzzfeed.com/noradominick/tv-moments-that-were-actually-improvised">Here Are 21 TV Moments You Probably Didn’t Know Were Unscripted</a>.” Compared with other Buzzfeed articles about entertainment that were published on the same dates, the pieces about spontaneity garnered nearly double the social media engagement in comments, likes and shares.</p>
<p>We also ran an online raffle in which people could win a real, customized <a href="https://www.cameo.com/">Cameo</a> greeting from a celebrity of their choice. The vast majority of participants – 84.1% – wanted their chosen celebrity to record a fully improvised, off-the-cuff message rather than a scripted personal greeting.</p>
<p>But what is it that accounts for this preference?</p>
<p>Across a variety of experiments, our results showed that people are drawn to spontaneity because they believe it provides a glimpse into a performer’s true self. Our findings reveal that people rate entertainers as more sincere, genuine and authentic when they act spontaneously, rather than when they plan, and authenticity is something that <a href="https://doi.org/10.1086/615047">consumers hold in extremely high regard</a>.</p>
<p>But our research also revealed that spontaneity has a cost: When people acted spontaneously, our participants thought the output could be lower quality, less poised and more error prone. For instance, while a chef who leverages spontaneity in their cooking may be seen as more authentic, people might expect their meals to taste worse.</p>
<p>So, although participants often preferred spontaneous moments in entertainment, we found that that preference went away when money was on the line. For example, in one of our experiments, when participants were gambling real money on a sporting event, they preferred players who stuck to the game plan.</p>
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<a href="https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="friends laughing together on couch watching out of frame TV" src="https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528845/original/file-20230529-24-qf0yut.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">When it feels like anything can happen, audiences are hooked.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/friends-laughing-watching-tv-together-royalty-free-image/83827011">John Howard/DigitalVision via Getty Images</a></span>
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<h2>Why it matters</h2>
<p>U.S. adults spend around <a href="https://www.nielsen.com/us/en/insights/article/2018/time-flies-us-adults-now-spend-nearly-half-a-day-interacting-with-media/">six hours per day interacting with video-based</a> media and entertainment. And great entertainment often includes spontaneity: Think of ad-libbed TV moments (many of the <a href="https://uproxx.com/tv/succession-improvised-scene-connors-wedding/">most</a> <a href="https://www.vanityfair.com/hollywood/2023/05/succession-season-four-episode-nine-roman-funeral">heart-wrenching</a> sequences in “Succession”), impromptu concerts (<a href="https://www.smoothradio.com/artists/beatles/rooftop-concert-final-performance-get-back/">The Beatles’ 1969 rooftop concert</a>) and on-the-fly sports plays (Kansas City Chiefs quarterback Patrick Mahomes’ <a href="https://www.cbssports.com/nfl/news/watch-chiefs-patrick-mahomes-flips-no-look-td-pass-to-jerick-mckinnon-vs-broncos/">trademark “flick” pass</a>). Spontaneity-based entertainment, like improv comedy, reality TV and jazz soloing, continue to stand the test of time.</p>
<p>Our work illustrates that spontaneity can be a powerful tool to boost publicity and engagement and generate positive impressions. Working on a new project? Perhaps leave time for unplanned action. Promoting a new show or product? Consider talking about the unscripted, behind-the-scenes moments. On a first date? Maybe fight the urge to plan your talking points ahead of time. Coming off as truly yourself might mean that you are slightly less poised and articulate, but the trade-off can be worth it.</p>
<h2>What’s next</h2>
<p>In our studies, we told participants that performances were either planned or spontaneous and then measured their preferences. But what if we hadn’t told them which things were ad-libbed?</p>
<p>Moving forward, we’re interested in understanding if people can accurately tell whether an action is spontaneous just by watching it, and, if so, how they know. Are there social or behavioral cues, like eye contact, colloquial language or intense emotion, that signal spontaneous action? </p>
<p>Of course, being able to identify the “tells” of spontaneity might raise a concern that spontaneity – and, therefore, authenticity – <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2014/06/02/if-you-can-fake-spontaneity-you-have-it-made-five-key-questions-about-the-grassroots-industry/">can be faked</a>. So another avenue we’re excited to pursue is understanding the moral and emotional implications of <a href="https://slate.com/news-and-politics/2011/08/manufacturing-spontaneity.html">manufactured spontaneity</a>.</p><img src="https://counter.theconversation.com/content/203487/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Audiences love improvised, off-the-cuff entertainment, and new research suggests it’s because spontaneity seems to offer a glimpse of the performer’s authentic self.Jacqueline Rifkin, Assistant Professor of Marketing, Cornell UniversityKatherine Du, Assistant Professor of Marketing, University of Wisconsin-MilwaukeeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1948212022-11-23T19:12:20Z2022-11-23T19:12:20ZSpending too much money? Tempted by sales? These ways to ‘hack’ your psychology can help<figure><img src="https://images.theconversation.com/files/496419/original/file-20221121-22-v7a0j1.jpg?ixlib=rb-1.1.0&rect=210%2C983%2C6545%2C4227&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/To5wAJDt1IM">Jezael Melgoza/Unsplash</a></span></figcaption></figure><p>It’s late November, which means the holiday sales period has well and truly begun. If you haven’t already seen your spending go up, the possibility is looming.</p>
<p>And you probably have some concerns about spending your money wisely. Furthermore, shopping can be a harrowing experience, and our attitudes towards money are tied up in all kinds of feelings.</p>
<p>Based on psychology, here are three tips to improve the way you spend your hard-earned cash this holiday season. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-choose-the-right-christmas-gift-tips-from-psychological-research-149739">How to choose the right Christmas gift: tips from psychological research</a>
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<h2>Before the purchase – patience is your friend</h2>
<p>One of the amazing features of the human mind is that we can mentally time travel: we can imagine what the future is going to <em>feel</em> like. Scientists call this “<a href="https://doi.org/10.1016/S0065-2601(03)01006-2">affective forecasting</a>”. </p>
<p>Thinking about a future trip – imagining the warm sun, the sand between your toes, finding yourself smiling – is an example of such mental time travel. </p>
<p>However, it turns out <a href="https://www.bauer.uh.edu/vpatrick/docs/Looking%20Through%20the%20Crystal%20Ball.pdf">we’re not very good at affective forecasting</a>. We get wrong not only the emotions we will experience, but also their intensity and duration. Lottery winners are a classic example – contrary to expectations, <a href="https://doi.org/10.1037//0022-3514.36.8.917">many are not happy</a>, or not happy for long.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/cant-resist-splurging-on-online-shopping-heres-why-138938">Can't resist splurging on online shopping? Here's why</a>
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<p>More importantly, you can derive happiness from just <em>anticipating</em> future experiences. For example, one study measured the happiness of 974 people going on a trip compared with 556 people not going on a trip. As you might expect, the vacationers were relatively happier – <a href="https://doi.org/10.1007%2Fs11482-009-9091-9">but only before the trip</a>.</p>
<p>So, how can we take advantage of our capacity to mentally time travel?</p>
<p><strong>Tip #1: Pay now, consume later.</strong> These days, fuelled by the rise of “buy now, pay later” options, we get to consume what we want immediately. However, this instant gratification deprives us of a key source of happiness: anticipation. A better strategy is to commit to buy something and then wait a little before actually consuming it. </p>
<h2>At the point of purchase – notice you’re paying</h2>
<p>An inevitability of every purchase is spending money. This represents a cost, both in terms of the monetary value but also the opportunity to buy other things.</p>
<p>Costs are a form of loss, and <a href="https://doi.org/10.1037/0003-066X.39.4.341">we don’t like losing things</a>. For that reason, it psychologically hurts to spend money. Scientists call this the “<a href="https://doi.org/10.1287/mksc.17.1.4">pain of paying</a>”. </p>
<p>According to <a href="https://doi.org/10.1111/1467-8721.00151">one theory of shopping</a>, we decide to buy after making a mental calculation: is the anticipated pleasure of consuming higher than the anticipated pain of buying?</p>
<p><a href="https://doi.org/10.1016%2Fj.neuron.2006.11.010">This calculus</a> is even represented in the brain. For example, <a href="http://dx.doi.org/10.2139/ssrn.2901808">one study</a> looking at people’s brains with fMRI while they purchased food found neural activity in areas linked to higher-order, affective pain processing, which correlated with how high the price was. </p>
<p>How did you pay for your last meal? Did you have to dig into your wallet or purse trying to extract the appropriate combination of notes and coins? Maybe you simply pulled out a plastic card and swiped it on the reader? Or perhaps you absentmindedly touched your smartphone to the machine. </p>
<figure class="align-center ">
<img alt="A person holding up their smartphone to a contactless payment system" src="https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/496420/original/file-20221121-14-8dpx7o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">‘Tapping’ with your phone greatly reduces the pain of paying.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/k24rOBJ2D_0">naipo.de/Unsplash</a></span>
</figcaption>
</figure>
<p>It turns out your method of payment changes how much pain you feel. In <a href="https://doi.org/10.1093/jcr/ucv056">one study</a>, researchers asked some university employees if they would like to buy a mug at a discounted price. Half were only allowed to pay in cash, whereas the other half had to use a debit or credit card.</p>
<p>Those who paid in cash self-reported more pain of paying. So, how can you use this to your advantage?</p>
<p><strong>Tip #2: Ramp up the pain.</strong> If you’re worried about overspending this holiday period, ramp up the pain of paying. You can do this by using cash or receiving a notification each time money leaves your account.</p>
<h2>After the purchase – stop chasing rainbows</h2>
<p>A fundamental feature of human beings is that we are adaptive – we easily get used to the new normal. This applies to our purchases, too. Scientists call it “<a href="https://www.cmu.edu/dietrich/sds/docs/loewenstein/HedonicAdaptation.pdf">hedonic adaptation</a>”: over time, consumption of the same thing brings decreasing happiness.</p>
<p>Remember the day you got your smartphone? You may have felt joy as you caressed the smooth aluminium back and watched light glint off the unblemished glass. Now look at your phone. What happened to the joy?</p>
<p>It’s normal to experience hedonic adaptation. However, one problem is that we don’t anticipate it.</p>
<p>Remember affective forecasting? Since <a href="https://doi.org/10.2307/3150499">satisfaction is a function of expectations relative to performance</a>, when we fail to adjust our expectations in light of the inevitable hedonic adaptation, we end up dissatisfied.</p>
<p>The second problem with hedonic adaptation is that the obvious solution appears to be buying something new. Maybe you need a new smartphone to replace your slightly scratched-up old one? If this is your thinking, you’ve just hopped onto the <a href="https://doi.org/10.1037/0003-066X.61.4.305">hedonic treadmill</a>.</p>
<p>Now the only way to maintain your happiness is to spend more and more money to get better and better versions of everything. So, how can you get off this treadmill?</p>
<p><strong>Tip #3: Buy experiences, not things</strong>. It turns out <a href="https://doi.org/10.1093/jcr/ucaa047">people end up happier when they buy experiences rather than things</a>. For example, <a href="https://doi.org/10.1007/s12232-010-0093-6">a study</a> that tracked how older adults spent their money found that only one category of spending was related to happiness: leisure purchases, such as going on trips, seeing a movie at the cinema, and cheering at sporting events.</p>
<p>One reason for this is that <a href="https://doi.org/10.1086/597049">we adapt to purchases of experiences more slowly</a> than purchases of material things. </p>
<p>So, the next time you’re tossing up between buying tickets to a festival or getting the latest gadget, pick up your scratched-up smartphone and pre-purchase some festival tickets for you and your friends.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-know-if-your-online-shopping-habit-is-a-problem-and-what-to-do-if-it-is-143969">How to know if your online shopping habit is a problem — and what to do if it is</a>
</strong>
</em>
</p>
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<img src="https://counter.theconversation.com/content/194821/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian R. Camilleri does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our relationship with money is complex – but when it comes time to indulge or resist the sales, a few tricks can help your spending.Adrian R. Camilleri, Senior Lecturer in Marketing, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1716942021-11-19T15:05:13Z2021-11-19T15:05:13ZRegretting a pandemic purchase? Five ways to avoid buyer’s remorse in the future<figure><img src="https://images.theconversation.com/files/432170/original/file-20211116-13-m45klz.jpg?ixlib=rb-1.1.0&rect=11%2C88%2C7337%2C4021&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/group-people-shopping-concept-525001696">Rawpixel.com / Shutterstock</a></span></figcaption></figure><p>A recent survey found that <a href="https://www.bbc.co.uk/news/business-59207124">one in ten Britons</a> regret a pandemic purchase. The items people no longer want range from kitchen appliances to hot tubs and, sadly, <a href="https://www.bbc.co.uk/news/uk-wales-58996017">even dogs</a>. </p>
<p>The <a href="https://www.nature.com/articles/d41586-021-00175-z">pandemic created feelings of anxiety</a> as people felt uncertain about what was going on. Anxiety commonly fuels <a href="https://academic.oup.com/jcr/article-abstract/34/4/480/1820248">materialistic values</a> that increase the likelihood that people will make purchases. Materialists tend to purchase goods based on their <a href="https://www.sciencedirect.com/science/article/pii/S0167487001000691?casa_token=baH9yDuus-kAAAAA:CfrIlYmFxBeva-z6n_Syampt_9bdEOwwQSXlGbGUGK0bMhSTz_0cKejsgpwpfRIXEyaXvtfz">perceived status</a>, so it is not surprising that many invested in expensive items during the pandemic, as they were spending less money on items like travel and dining out.</p>
<p>As we return to “normal” life, anxiety levels are coming down and people no longer find the items they bought desirable or useful. Our life priorities are changing, and with them, our material wants. Shoppers judge purchases based on the item’s ability to satisfy their needs. When items are no longer desirable and they wish to purchase something new (that they may not be able to afford), “buyer’s remorse” kicks in for the more expensive goods they bought earlier.</p>
<p>During the pandemic, many also turned to online shopping, by choice or necessity. This can also <a href="https://www.sciencedirect.com/science/article/pii/S0747563215002241?casa_token=cOhG_4QXoxoAAAAA:vet90UigV63GENLuqhhBeK017KiwV0DN1CuztshL9VWxhyPiTGO5CoA2kXKN3aFq-b91CHfa">lead to higher levels of regret</a> as consumers are not able to physically interact with the items they buy. When the package arrives on the doorstep, it may not be exactly what they wanted or expected, leaving people feeling let down.</p>
<figure class="align-center ">
<img alt="A person bending down to lift a large stack of Amazon boxes in their home" src="https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=457&fit=crop&dpr=1 600w, https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=457&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=457&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=574&fit=crop&dpr=1 754w, https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=574&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/432166/original/file-20211116-27-1ah2sk9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=574&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Online shopping and speedy delivery could have made many pandemic shoppers regret their purchases.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/paris-france-jan-13-2018-stack-1126539725">Hadrian / Shutterstock</a></span>
</figcaption>
</figure>
<h2>Avoiding buyer’s remorse</h2>
<p>We can’t change the past, but we can at least try to make better consumer decisions in the future. There are a few things you can do to reduce the likelihood of wishing you had never made a particular purchase:</p>
<p><strong>1. Experiences over things</strong></p>
<p>While buying new clothes or toys may be satisfying in the short term, <a href="https://psycnet.apa.org/record/2011-17861-001">paying for an experience</a> – like going on holiday or going bowling – is less likely to lead to buyer’s remorse. This is because an item can continuously be directly compared to other items you own that may be cheaper or inferior in some way. An experience or activity is unique to you and harder to compare. </p>
<p><strong>2. When in doubt, don’t buy</strong></p>
<p>If you’re on the fence about buying something, it’s better to resist. Studies show that people are <a href="https://academic.oup.com/jcr/article-abstract/33/3/342/1891923">less likely to experience regret</a> if they fail to buy something than they would if they bought it. </p>
<p><strong>3. Enrich your life</strong></p>
<p>Spend your money on items that are linked to <a href="https://blogs.scientificamerican.com/observations/how-to-avoid-purchase-regret/">personal development</a>. When purchases are linked to aspects such as community, healthcare, arts, entertainment and education, <a href="https://advanced-hindsight.com/blog/common-cents-lab-unveils-millennial-financial-regret-spending-infographic/">people feel more satisfied</a> with what they bought. </p>
<p><strong>4. Stay away from sales</strong></p>
<p>Impulse buying <a href="http://jbm.johogo.com/pdf/volume/2501/JBM-vol-2501.pdf#page=10">often leads to regret</a>. It can be difficult to stop yourself when you have an urge to splurge, but there are precautions you can take. Stay away from sales and online promotion events like Black Friday and Cyber Monday. Before shopping, determine how much you can afford to spend and what you want to spend it on – make a list and stick to it. </p>
<p><strong>5. Think of others first</strong></p>
<p>Instead of focusing on yourself and your wants, think about <a href="https://psycnet.apa.org/buy/2013-04859-001">purchasing things for others</a>. Giving gifts can be satisfying for both the giver and the receiver.</p>
<p>With Christmas just around the corner, people are likely to spend more than they intend to on presents and food. It is a good time to reflect on what you can do to avoid the possibility of buyer’s remorse. The above tips should help you avoid purchasing unneeded items and have a more rewarding holiday shopping season.</p><img src="https://counter.theconversation.com/content/171694/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cathrine Jansson-Boyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>How to protect your future self from post-purchase regret.Cathrine Jansson-Boyd, Reader in Consumer Psychology, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1552592021-02-16T15:24:30Z2021-02-16T15:24:30ZHow to rebrand a fish so that it sounds tastier<figure><img src="https://images.theconversation.com/files/384259/original/file-20210215-19-628lbk.jpg?ixlib=rb-1.1.0&rect=8%2C8%2C5599%2C3724&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Megrim sole...or Cornish sole?</span> <span class="attribution"><span class="source">Iakov Filimonov / shutterstock</span></span></figcaption></figure><p>British fishermen have decided to <a href="https://www.bbc.co.uk/news/uk-england-cornwall-55996938">rename two of their biggest exports</a> as they turn to local markets to overcome some Brexit-related difficulties with shipping products abroad. What used to be known as the megrim sole and spider crab will now be Cornish sole and Cornish king crab in order to make them more appealing to the local market. The question is whether a simple name change will make the megrim sole or the spider crab more likeable to the British consumer.</p>
<p>Humans really can eat with their ears, as lots of research has demonstrated the sound heard while eating or drinking can affect the way people think about food. Hearing “<a href="https://www.sciencedirect.com/science/article/abs/pii/S0950329311001807">bitter sounding</a>” music when eating a toffee results in the eater perceiving it to be significantly bitterer. Chewing is not only felt but also heard, and this helps to establish whether the food is <a href="https://www.sciencedirect.com/science/article/abs/pii/S0950329301000532">perceived as “crunchy” or “crisp”</a>. Crispy has been described as a short, high-pitched sound experienced during the first bite and crunchy as a loud and lower-pitched sound, experienced over several chews.</p>
<p>Volume is also a factor. Potato crisps that sound louder when you bite into them are deemed to taste <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-459x.2004.080403.x">crispier and fresher</a>. People also tend to think that the smell of potato crisps are more pleasant after <a href="https://academic.oup.com/chemse/article/36/3/301/506704?login=true">hearing the sound of someone else eating them</a>. All of this demonstrates that sound can make a big difference to how food is perceived.</p>
<h2>The sound of a name</h2>
<p>How a brand sounds when spoken out loud also has a fundamental role to play in how consumers view it. When we hear the name of a product we instantaneously attach meaning to it and form an idea of whether we perceive it positively, even before we have actually seen the product. This happens because different types of sounds have symbolic meaning, something that is apparent from the fact that <a href="https://link.springer.com/article/10.1023/A:1008184423824">people infer specific meaning from unfamiliar brand names</a>. For example, certain vowels, such as i, ā, ē and e, can lead to a perception that the brands are smaller, lighter, milder, thinner, softer, faster, colder, friendlier and even more feminine. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Ikea sign in France" src="https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/384292/original/file-20210215-13-1i6cmlu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Vowels matter.</span>
<span class="attribution"><span class="source">sylv1rob1 / shutterstock</span></span>
</figcaption>
</figure>
<p>Using symbolic sounds for brands also <a href="https://www.tandfonline.com/doi/abs/10.1080/10696679.2001.11501889">results in higher levels of likeability</a> and a clearer and stronger positioning in their minds. This is also applicable to food as psychologists found that people believed an ice cream named “Frosh” <a href="https://academic.oup.com/jcr/article-abstract/31/1/43/1812051">was creamier</a> than an ice cream called “Frish”. Just altering one sound makes a big difference to the consumer perception. Such effects demonstrate the positive impact that a well-named brand can have on perceived attractiveness of a product, and the creation of brand names should therefore be considered an important part of successful product marketing.</p>
<h2>Brand association</h2>
<p>While the sound of the name is clearly important so also are the associations coupled with a brand. The adjective Cornish triggers associations with the English county of Cornwall. One of the most commonly visited tourist destinations in the UK, Cornwall is a “brand” in its own right, and its amazing coastline and beaches feature prominently in its <a href="https://journals.sagepub.com/doi/abs/10.1177/146879760100100205">marketing</a>. Therefore when people hear the word Cornish, they are likely to instantaneously think of the sea and seafood. This should be beneficial as places with a more recognised reputation for food can benefit from using the name <a href="https://www.emerald.com/insight/content/doi/10.1108/JPMD-10-2018-0081/full/html">as a promotional tool</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="'Harbour seafood' restaurant in Cornwall" src="https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/384287/original/file-20210215-13-o78ld6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Why not wash it down with some frish ice cream?</span>
<span class="attribution"><span class="source">Lucian Milasan / shutterstock</span></span>
</figcaption>
</figure>
<h2>Do consumers have to try it to like it?</h2>
<p>Many chefs and restaurants are looking to fine tune their food with <a href="https://trulyexperiences.com/blog/magic-multisensory-dining/">multisensory science</a>. For instance diners at The Fat Duck, a restaurant in England run by innovative celebrity chef Heston Blumenthal, are played the sounds of waves breaking to enhance the experience of eating a seafood course. </p>
<p>Given developments like this, it is hardly surprising that Cornish fishermen are also considering the importance of a name. It seems the <a href="https://www.bbc.co.uk/news/uk-england-cornwall-55996938">industry thinks</a> that if it can just get people to try its newly branded fish, they will like what they taste. However, with the right-sounding product name consumers won’t even have to try the fish as they will already have made up their minds about whether it is tastes nice. So a simple name change may not be so simple after all.</p><img src="https://counter.theconversation.com/content/155259/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cathrine Jansson-Boyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Research suggests that the name of a product affects our perceptions of it – before we have even tried it.Cathrine Jansson-Boyd, Reader in Consumer Psychology, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1497392020-11-18T02:46:53Z2020-11-18T02:46:53ZHow to choose the right Christmas gift: tips from psychological research<figure><img src="https://images.theconversation.com/files/369466/original/file-20201116-23-2fwt45.jpg?ixlib=rb-1.1.0&rect=44%2C97%2C5000%2C3226&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Christmas is a time of celebration, relaxation and gift giving. </p>
<p>But choosing gifts can also make it a time of stress and <a href="https://doi.org/10.1086/314310">anxiety</a>. The wrong gift can actually <a href="https://psycnet.apa.org/record/2008-11486-006">do more harm than good</a>. </p>
<p>Here is some advice, based on decades of research, on how to side-step such pitfalls. </p>
<h2>Why do we give gifts?</h2>
<p>Research into the <a href="https://doi.org/10.1086/208956">psychology of gift-giving</a> suggests there are two goals to consider when giving someone a gift.</p>
<p>The first is to <a href="https://doi.org/10.1093/jcr/ucz009">make the recipient happy</a>. That mostly depends on whether the gift is something they want.</p>
<p>The second is to <a href="https://doi.org/10.1086/209546">strengthen the relationship between giver and recipient</a>. This is achieved by giving a thoughtful and memorable gift – one that shows the giver really knows the recipient. Usually this means figuring out what someone wants without directly asking. </p>
<p>You can see the conundrum. </p>
<p>To get someone the gift they most desire, the obvious thing to do is ask. This approach can achieve high marks on desirability. But it is set up to fail on communicating thoughtfulness.</p>
<p>The following graphic illustrates the problem (with myself as the example recipient).</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=452&fit=crop&dpr=1 754w, https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=452&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/369503/original/file-20201116-23-18symvi.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=452&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Two dimensions to consider when buying someone a gift: thoughtfulness and desirability.</span>
<span class="attribution"><span class="source">Images from https://pixabay.com/</span></span>
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</figure>
<hr>
<p>The best kind of gift is one both desired by the recipient and is thoughtful. For me this might be a custom t-shirt printed with an in-joke. </p>
<p>The worst kind of gift, on the other hand, is neither desired nor thoughtful. For me, this might be a pair of socks.</p>
<p>Then there are desirable but unthoughtful gifts, such as cash, and undesired but very thoughtful gifts, which for me would be officially naming a star in my honour. I love astronomy but this just isn’t for me.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/were-not-as-grinchy-as-we-think-how-gift-giving-is-inspired-by-beliefs-based-altruism-108739">We're not as Grinchy as we think: how gift-giving is inspired by beliefs-based altruism</a>
</strong>
</em>
</p>
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<h2>Navigating social risk</h2>
<p>This is why buying a gift can be so anxiety-inducing. There is a “<a href="https://doi.org/10.2753/MTP1069-6679200304">social risk</a>” involved. </p>
<p>A well-received gift can <a href="https://doi.org/10.1086/208956">improve the quality of relationship between giver and recipient</a> by increasing feelings of connection, bonding, and commitment. A poorly received gift can <a href="https://doi.org/10.1521/soco.2008.26.4.469">do the opposite</a>.</p>
<p>This has been shown by research. A <a href="https://doi.org/10.1086/209546">1999 study</a> asked 129 people to describe in detail a situation in which they had received a gift. Ten people reported gifts that weakened the relationship. Two people actually ended the relationship after the gift.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&rect=0%2C12%2C4250%2C2805&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/368216/original/file-20201109-15-10qkye6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The thought doesn’t count as much as you think. Gift givers tend to overestimate how well unsolicited gifts will be recieved.</span>
</figcaption>
</figure>
<h2>How much does the thought count?</h2>
<p>Research also shows people tend to overestimate their ability to discern what a recipient will like, and therefore what gifts will lead to a strengthening of the relationship.</p>
<p>A <a href="https://doi.org/10.1016/j.jesp.2011.03.015">2011 study</a> asked respondents to think back to either their own wedding or a wedding to which they were a guest. Gift recipients were asked to rate how appreciative they were of gifts either listed on the gift registry or not. Guests were asked to estimate how well they thought gifts were received.</p>
<p>Gift recipients strongly preferred gifts on their list. However, gift givers tended to wrongly assume unsolicited gifts (those not on the registry) would be considered more thoughtful and considerate by their intended recipients than was the case. </p>
<p>Gift givers also tend to overestimate that more expensive gifts will be received as being more thoughtful. But it turns out gift recipients <a href="https://doi.org/10.1016/j.jesp.2008.11.003">appreciate expensive and inexpensive gifts similarly</a>. In reality, they actually feel closer to those who <a href="https://doi.org/10.1177/0146167218784899">give convenient gifts</a>, such as a gift certificate to a nearby ordinary restaurant rather than a distant upscale restaurant.</p>
<h2>The psychology of cash</h2>
<p>What about simply giving cash? </p>
<p>After all, the recipient can buy exactly what they most desire. But cash is <a href="https://doi.org/10.1016/0167-4870(83)90028-4">considered unthoughtful</a> because it requires no effort and seems to put a dollar value on the relationship. </p>
<p>In Chinese cultures, cash is given in a red envelope to decommodify the money by literally enveloping it in a symbol of good luck. If you’re going to give cash, think about <a href="https://www.buzzfeed.com/maitlandquitmeyer/dollar-dollar-bill-yall">doing it creatively</a>, such as through clever origami or in some other way that personalises it. This will show a degree more thoughtfulness. </p>
<p>The closest alternative to cash is the gift card. The main benefit is that it <a href="https://doi.org/10.1080/09593969.2015.1086402">requires some effort</a> and allows some thoughtfulness in the selection of which gift card to purchase. Nevertheless, the research suggests the gift card is often reached for as a <a href="https://doi.org/10.2753/MTP1069-6679200304">last resort</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/no-presents-please-how-gift-cards-initiate-children-into-the-world-of-credit-100009">No presents, please: how gift cards initiate children into the world of 'credit'</a>
</strong>
</em>
</p>
<hr>
<h2>The best gift of all</h2>
<p>If you want to have a wrapped gift under the Christmas tree and haven’t been tipped off on exactly what the recipient wants, go for something practical with a personalised touch. If you really are struggling, then a thoughtful card together with a flexible gift card is a safe option. </p>
<p>But the main takeaway from the psychology of gift-giving research is that, if your goal is to strengthen your relationship with the recipient, give them an experience.</p>
<p>A <a href="https://doi.org/10.1093/jcr/ucw067">2016 study</a> asked people to give a friend either a “material” or “experiential” gift (valued at $15). Material gifts included things such as clothing. Experiential gifts included things such as movie tickets. Recipients of the experiential gifts showed a stronger improvement in relationship strength than recipients of the material gifts.</p>
<p>The most precious gift you can give a loved one, though, is actually quite simple: quality time. In a <a href="https://doi.org/10.1023/A:1021516410457">2002 study</a> involving 117 people, more happiness was reported from family and religious experiences than from events where spending money and receiving gifts was the focus.</p>
<p>So this Christmas, grab a drink, sit down and have a conversation. Get to know each other. If done well, come next Christmas, you’ll both know exactly what gift to get each other.</p><img src="https://counter.theconversation.com/content/149739/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Adrian R. Camilleri does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Choosing the wrong gift can damage a relationship. Here is some advice, based on decades of research, on how to side-step the pitfalls.Adrian R. Camilleri, Senior Lecturer in Marketing, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1379872020-05-20T14:55:09Z2020-05-20T14:55:09ZCoronavirus and cognitive bias: The surprising reasons people cheat at social distancing<figure><img src="https://images.theconversation.com/files/334931/original/file-20200514-77255-kbx2n7.jpg?ixlib=rb-1.1.0&rect=571%2C729%2C1235%2C758&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">To save as many lives as possible, public health efforts must take into account our subconscious biases.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Jonathan Hayward</span></span></figcaption></figure><p>As the world fights the novel coronavirus pandemic, our strongest weapon right now is <a href="https://www.cbc.ca/news/politics/trudeau-covid-19-coronavirus-pandemic-social-distancing-1.5507379">physical distancing</a>. <a href="https://doi.org/10.1016/S2468-2667(20)30073-6">Proven by studies</a> and <a href="https://www.npr.org/2020/03/23/820066211/an-unfinished-lesson-what-the-1918-flu-tells-us-about-human-nature">supported by history</a>, staying home save lives.
In fact, bending this rule to meet even a few other people may <a href="https://www.washington.edu/news/2020/04/13/just-one-friend-covid-19/">undo our efforts</a>. </p>
<p>While many have accepted the safety directions, some are <a href="https://www.citynews1130.com/2020/04/14/mayor-island-traveller-covid/">still travelling</a>. More people have died of COVID-19 in the United States than any other country, yet the President Trump has <a href="https://www.nytimes.com/2020/04/17/us/politics/trump-coronavirus-governors.html">encouraged people to gather</a> and Georgia’s governor supported the <a href="https://thehill.com/policy/healthcare/493748-georgia-to-reopen-some-businesses-including-gyms-and-salons">reopening of bowling alleys and nail salons</a>. So why is it so hard for us to do what is right?</p>
<h2>Subconscious biases affect our behaviour</h2>
<p>As a doctor and a father, I get that we are all trying to keep a sense of normalcy for ourselves and our families. But the reasons we resist distancing are often <a href="http://danariely.com/books/predictably-irrational/">beyond rationality</a>: there are reflexive thoughts that drive our behaviour, often <a href="https://www.theatlantic.com/magazine/archive/2018/09/cognitive-bias/565775/">without our own awareness</a>. And if we want to save as many lives as possible, our efforts have to take these subconscious biases into account.</p>
<p>For example, asking people to <a href="https://www.theglobeandmail.com/opinion/article-physical-distancing-is-our-only-hope-we-must-all-adhere-to-it/">observe physical distancing</a> may actually have the opposite effect for those who fear that compliance will lead to a restriction in their freedom. This is called <a href="http://journal.sjdm.org/15/15824a/jdm15824a.html">reactance bias</a>, and it is partly why in our society teenagers drink alcohol and some drivers resist seatbelts.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=441&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=441&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=441&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=554&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=554&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335201/original/file-20200514-77255-v8c67j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=554&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">People protest stay-at-home order outside the entrance of the Michigan House of Representatives in Lansing, Mich., April 30, 2020.</span>
<span class="attribution"><span class="source">(Matthew Dae Smith /Lansing State Journal via AP)</span></span>
</figcaption>
</figure>
<p>It is also why pandemic safety measures can be easily framed as a restrictive “<a href="https://www.salon.com/2020/04/17/dr-fauci-shuts-down-fox-news-laura-ingraham-after-she-complains-about-lockdowns_partner/">lockdown</a>” and why the U.S. president can <a href="https://www.npr.org/2020/04/18/837974858/sen-tim-kaine-trump-is-trying-to-foment-division">incite people to unsafely meet up</a> in order to “liberate” their state. Given how quickly and passionately protesters follow populist leaders, it is not surprising that many of the same <a href="https://www.rferl.org/a/eu-monitors-sees-coordinated-covid-19-disinformation-effort-by-iran-russia-china/30570938.html">bad actors</a> seen in anti-science campaigns against vaccination and climate change are again preying on swift emotions like <a href="https://doi.org/10.7326/M20-0912">fear and disgust</a> to manipulate us into acting before we think. </p>
<p>Another way our minds mislead us is that we judge ourselves differently than we judge others. When we trip it is because the ground is uneven; others misstep due to clumsiness. Two-thirds of people say they are <a href="https://www.theglobeandmail.com/globe-drive/culture/commuting/two-thirds-of-drivers-think-theyre-better-than-you/article589874/">better than average drivers</a>. We all need some esteem to allow us to feel capable in life, but the flip side of this self-centredness is that we downplay the risks of daily grocery trips or play dates because, well, it’s us. </p>
<p>But the novel coronavirus <a href="https://www.cdc.gov/mmwr/volumes/69/wr/mm6914e1.htm">does not differentiate</a> between us and others, good or bad, our tribe or not. So although some people are more susceptible to serious complications, many otherwise <a href="https://www.cnn.com/2020/04/05/health/young-people-dying-coronavirus-sanjay-gupta/index.html">young and healthy</a> people have died from COVID-19. We just don’t think we’ll become one of “those people.”</p>
<h2>The tales we tell</h2>
<p>Stories, whether tales or in pictures, are also important in understanding our behaviour since <a href="https://hbr.org/2014/10/why-your-brain-loves-good-storytelling">we are wired</a> to remember them much more than numbers. Dry statistics of deaths in Asia or Europe are difficult to comprehend because our brains cannot emotionally connect. </p>
<p>But <a href="https://dx.doi.org/10.3758%2Fs13423-015-0807-6">stories are memorable</a> and become compelling when they evoke <a href="https://www.theatlantic.com/health/archive/2014/02/new-research-says-there-are-only-four-emotions/283560/">basic emotions</a> such as happiness, sadness and fear. The heartbreaking image of three-year-old Alan Kurdi’s body lying on a Turkish beach is unforgettable, and elicited a much greater reaction than reports of <a href="https://www.usatoday.com/story/news/world/2020/03/13/syria-war-bashar-assad-prospers-9-years-barbarity-confusion/4939671002/">Syria’s attacks on its citizens</a>. Recently, Dr. Anna Carvalho’s decision to <a href="https://www.citynews1130.com/2020/04/16/er-doctor-vancouver-plea-viral/">isolate from her family</a> included a photograph of her children waving through their aunt’s window, making the plea to physically distance more real and immediate — factors that <a href="https://www.bbc.com/news/business-41549533">nudge us</a> towards action.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=416&fit=crop&dpr=1 600w, https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=416&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=416&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=523&fit=crop&dpr=1 754w, https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=523&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/334820/original/file-20200513-156637-1tnl4v1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=523&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A woman wearing a face mask walks past portraits of Dr. Theresa Tam and Dr. Bonnie Henry on a boarded up business in downtown Vancouver, B.C., on April 1, 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jonathan Hayward</span></span>
</figcaption>
</figure>
<p>Science fiction author Robert A. Heinlein wrote, “Don’t appeal to man’s better nature — <a href="https://www.penguinrandomhouse.com/books/291501/time-enough-for-love-by-robert-a-heinlein/">he may not have one</a>.” More accurately, hundreds of cognitive biases such as those discussed here greatly affect the decisions we make, sometimes to our detriment. So if we are to change behaviour during this pandemic we must address both the rational and subconscious ways our minds work.</p>
<h2>Effective communication</h2>
<p>In order to build trust, leaders must be humble and honest. Familiar and regular communications from leaders like Drs. <a href="https://www.theglobeandmail.com/opinion/article-bonnie-henry-is-a-calming-voice-in-a-sea-of-coronavirus-madness/">Bonnie Henry</a> and <a href="https://policyoptions.irpp.org/magazines/april-2020/canadas-chief-medical-officers-put-womens-leadership-in-spotlight/">Theresa Tam</a> and Prime Ministers <a href="https://www.thestar.com/news/world/2020/03/31/donald-trump-should-take-a-lesson-from-justin-trudeau-and-even-doug-ford-on-coronavirus-leadership.html">Trudeau</a> and <a href="https://www.theatlantic.com/politics/archive/2020/04/jacinda-ardern-new-zealand-leadership-coronavirus/610237/">Ardern</a> can have <a href="https://us.macmillan.com/books/9780374533557">positive effects</a>. Pro-science messages from diverse influencers like <a href="https://www.cbc.ca/sports/ryan-reynolds-twitter-hayley-wickenheiser-medical-supplies-1.5523390">Hayley Wickenheiser</a>, Ryan Reynolds, <a href="https://www.cbc.ca/player/play/1716219971713">Chris Hadfield</a> and <a href="https://globalnews.ca/news/6732110/michael-buble-coronavirus-appeal-social-distancing/">Michael Bublé</a> have resonated. And <a href="https://covidstories.ihi.org/">we need stories</a>, lots of them, <a href="https://time.com/collection/coronavirus-heroes/5816885/frontline-workers-coronavirus/">of the front-line workers</a> risking their safety. </p>
<p>In turn, we must attempt to slow down and process our emotions and consider that bending the rules endangers others and <a href="https://doi.org/10.1016/S2468-2667(20)30073-6">lengthens the time</a> of distancing restrictions. For those whose opinions have become part of their own <a href="https://calgary.ctvnews.ca/public-health-experts-are-just-that-experts-u-of-c-professor-rejects-stephan-s-claim-that-covid-19-is-a-hoax-1.4893822">self-identity</a>, no fact will likely change their behaviour. Some personal liberties <a href="https://nationalpost.com/news/canada/covid-19-rising-costs-of-social-distancing">may have to be restricted</a> for the greater good in the same way we legislate sobriety for drivers and helmets for cyclists.</p>
<p>Containing the COVID-19 pandemic will require more than the heroic measures of our front-line workers: we must all make difficult sacrifices. Success will not be easy, but to save lives we must take into account the hidden ways our brains work. We must use strategies that represent more reasoned logic than we tend to rely on, left to our own devices.</p><img src="https://counter.theconversation.com/content/137987/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eric Cadesky does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Right now, physical distancing is the most important preventive strategy we have against COVID-19. So why is it so hard for us to do what’s right?Eric Cadesky, Clinical Associate Professor, Faculty of Medicine, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1375502020-05-12T14:54:06Z2020-05-12T14:54:06ZGovernments can learn from consumer psychology when it comes to public health messaging<p>While lockdown measures are being lifted in some parts of the world, the situation for millions remains the same: stuck at home due to social distancing, worried and looking to their government for news about when life may return to normal.</p>
<p>The way national leaders and governments are choosing to communicate complex and unsettling public health information about COVID-19 to their citizens has never been more important. There are plenty of examples of what happens when leaders don’t get the content, tone and message quite right: confusion and fear among <a href="https://www.theguardian.com/world/2020/may/07/mixed-messages-uk-governments-strategy-fuels-fears-of-rule-breaking">already confused and fearful populations</a>.</p>
<p>In Italy, the government has emphasised its concern for the wellbeing of the nation, and reports suggest that many citizens have felt <a href="https://www.tpi.it/opinioni/stile-conte-coronavirus-pacato-rassicurante-20200312564471/">calmed and reassured by this</a>. The US government’s tone is more assertive, with President Donald Trump “declaring war on the virus”. </p>
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Read more:
<a href="https://theconversation.com/coronavirus-us-and-uk-governments-losing-public-trust-137713">Coronavirus: US and UK governments losing public trust</a>
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<p>Meanwhile UK messaging has been mixed. For example, the Queen’s national address on April 5 was perceived by many <a href="https://www.vogue.com/article/queen-elizabeth-speech-coronavirus-hopeful-message">as reassuring and caring</a>, whereas the prime minister, Boris Johnson has been more combative. Like Trump, he has also referred to the pandemic as <a href="https://www.mirror.co.uk/news/politics/boris-johnson-declares-coronavirus-war-21707803">a war</a>.</p>
<p>But it doesn’t have to be like this. There is lots of research into the way brands communicate that suggests some tones work better than others when it comes to getting your message across. Governments can learn a great deal from these brands when it comes to delivering important public health messages – particularly when the information is complex and the methods used to keep everyone safe are unappealing. </p>
<p>Fighting talk can have a very different effect to offering a metaphorical arm around the nation’s shoulder. Plus, people respond to information differently depending on the time and circumstances of its delivery. This partly reflects how people are feeling, which must also be taken into account.</p>
<h2>Coping mechanisms</h2>
<p>The growing pool of research into the psychological impact of COVID-19 on mental wellbeing indicates that many are concerned and frustrated at best, fearful and lonely at worst. One <a href="https://www.mdpi.com/1660-4601/17/6/2032/htm">study in China found</a> the coronavirus led to heightened anxiety, depression, and indignation, as well as sensitivity to social risks. </p>
<p>Being isolated at home for weeks on end has left many feeling what psychologists call socially excluded. Research shows this can affect people in different ways. It can <a href="https://psycnet.apa.org/buy/2006-23056-005">damage your caring instincts</a> and make you less empathetic. It can also increase your need for emotional connection <a href="https://www.sciencedirect.com/science/article/abs/pii/S1057740815000157">to help you cope</a>. </p>
<p>There is also research that shows people who feel socially excluded prefer brands <a href="https://www.sciencedirect.com/science/article/abs/pii/S1057740816300316">that convey human-like features</a>. So for example with candy, they were drawn to M&M chocolates over Skittles because of the human-like M&M characters.</p>
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Read more:
<a href="https://theconversation.com/how-grime-and-drill-musicians-are-helping-fight-coronavirus-137350">How grime and drill musicians are helping fight coronavirus</a>
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<p>For a piece of forthcoming research, my colleagues J. Jeffrey Inman, Gülen Sarial-Abi and I have analysed how companies in Italy and the US are communicating with customers in lockdown and how they have responded. Over the course of March 10 to March 30, we found that companies used three overarching themes in their communications: togetherness, caring and fighting talk. In both Italy and the US, consumers were consistently more receptive to and said they preferred the brands using caring messaging. </p>
<p>For example, with skin care products, people reacted more positively to phrases that emphasised how it was nourishing and gentle on their skin compared to those that used words like “invigorating”, “warrior”, “potent” and “tough”. When we tested the same phrasing before the coronavirus, there was no difference in people’s reactions so we have reason to believe that it’s the feeling of social exclusion that draws people to the more caring messaging. </p>
<p>These are preliminary results, but they have implications for public health communication as governments around the world seek to plot a course out of lockdown in an orderly, safe way.</p>
<p>The Italian government’s more caring, supportive tone when communicating with its citizens during these difficult times seems best for the millions of people struggling with feelings of exclusion or loneliness. In contrast, Trump’s bombastic rhetoric may well risk alienating citizens already struggling with feelings of social exclusion.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/coronavirus-how-europes-monarchs-stepped-up-as-their-nations-faced-the-crisis-136057">Coronavirus: how Europe's monarchs stepped up as their nations faced the crisis</a>
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<p>Our findings suggest that the communication tone that is more helpful and provides more psychological relief to people experiencing social exclusion due to COVID-19 is a caring one, while making sure to boost self-esteem. In line with this, the British government could take a few lessons from the Queen by using a compassionate tone. As well as clear public health guidance, governments should emphasise their belief in the public’s ability to handle difficult situations.</p><img src="https://counter.theconversation.com/content/137550/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aulona Ulqinaku does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>People are more receptive to a caring tone than fighting talk.Aulona Ulqinaku, Lecturer in Marketing, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1288162019-12-31T13:36:44Z2019-12-31T13:36:44ZFive rules from psychology to help keep your new year’s resolutions<figure><img src="https://images.theconversation.com/files/306671/original/file-20191212-85417-az2z1c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">How to keep going with those resolutions.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/fitness-sport-people-lifestyle-concept-couple-343006619">Shutterstock</a></span></figcaption></figure><p>We are creatures of habit. Between a third and half of our behaviour is habitual, <a href="https://dornsife.usc.edu/assets/sites/545/docs/Wendy_Wood_Research_Articles/Habits/wood.neal.2009._the_habitual_consumer.pdf">according to research estimates</a>. Unfortunately, our bad habits compromise our health, wealth and happiness. </p>
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<p><em>You can listen to more articles from The Conversation, narrated by Noa, <a href="https://theconversation.com/uk/topics/audio-narrated-99682">here</a>.</em></p>
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<p>On average, it takes <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/ejsp.674">66 days to form a habit</a>. But positive behavioural change is harder than self-help books would have us believe. Only <a href="https://www.ncbi.nlm.nih.gov/pubmed/2728957">40% of people</a> can sustain their new year’s resolution after six months, while only <a href="https://www.ncbi.nlm.nih.gov/pubmed/16002825">20% of dieters</a> maintain long-term weight loss. </p>
<p>Education does not effectively promote behaviour change. A <a href="https://www.ncbi.nlm.nih.gov/pubmed/16536643">review of 47 studies</a> found that it’s relatively easy to change a person’s goals and intentions but it’s much harder to change how they behave. Strong habits are often <a href="http://eprints.whiterose.ac.uk/704/1/sheeranp1.pdf">activated unconsciously</a> in response to social or environmental cues – for example, we go to the supermarket <a href="https://www.bbc.co.uk/food/articles/how_supermarkets_tempt">about 211 times a year</a>, but most of our purchases are habitual. </p>
<p>With all this in mind, here are five ways to help you keep your new year’s resolutions – whether that’s taking better care of your body or your bank balance.</p>
<h2>1. Prioritise your goals</h2>
<p>Willpower is <a href="https://psycnet.apa.org/record/1998-00299-017">a finite resource</a>. Resisting temptation drains our willpower, leaving us vulnerable to influences that <a href="https://www.jstor.org/stable/10.1086/510228">reinforce our impulsive behaviours</a>. </p>
<p>A common mistake is being overly ambitious with our new year resolutions. It’s best to prioritise goals and focus on one behaviour. The ideal approach is to make small, incremental changes that replace the habit with a behaviour that supplies a similar reward. Diets that are too rigid, for example, require a lot of willpower to follow. </p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/8dAOTiWIPYE?wmode=transparent&start=1" frameborder="0" allowfullscreen=""></iframe>
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<h2>2. Change your routines</h2>
<p>Habits are embedded within routines. So disrupting routines <a href="https://psycnet.apa.org/record/2005-06516-003">can prompt us to adopt new habits</a>. For example, major life events like changing jobs, moving house or having a baby all promote new habits since we are forced to adapt to new circumstances. </p>
<p>While routines can boost our productivity and add stability to our social lives they should be chosen with care. People who live alone <a href="https://www.researchgate.net/publication/315552294_Habits_Across_the_Lifespan">have stronger routines</a> so throwing a dice to randomise your decision making if you do could help you disrupt your habits.</p>
<p>Our environment also affects our routines. For example, without giving it any thought, we eat popcorn at the cinema but not in a meeting room. Similarly, reducing the size of your storage containers and the plates you serve food on <a href="https://journals.sagepub.com/doi/10.1177/0013916506295574">can help to tackle overeating</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/306667/original/file-20191212-85391-1f1ydp4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Size matters.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/JPKbfyoo84A">Karly Gomez via Unsplash</a></span>
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<h2>3. Monitor your behaviour</h2>
<p>“Vigilant monitoring” appears to be the most effective strategy for tackling strong habits. This is where people actively monitor their goals and regulate their behaviours in response to different situations. A <a href="https://www.ncbi.nlm.nih.gov/pubmed/19916637">meta-analysis of 100 studies</a> found that self-monitoring was the best of 26 different tactics used to promote healthy eating and exercise activities. </p>
<p>Another <a href="https://www.researchgate.net/publication/37367696_Implementation_Intentions_and_Goal_Achievement_A_Meta-Analysis_of_Effects_and_Processes">meta-analysis of 94 studies</a> informs us that “implementation intentions” are also highly effective. These personalised “if x then y” rules can counter the automatic activation of habits. For example, if I feel like eating chocolate, I will drink a glass of water. </p>
<p><a href="https://www.researchgate.net/publication/281450400_How_to_Maximize_Implementation_Intention_Effects">Implementation intentions</a> with multiple options are very effective since they provide the flexibility to adapt to situations. For example, “if I feel like eating chocolate I will (a) drink a glass of water, (b) eat some fruit; or (c) go for a walk”. </p>
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<img alt="" src="https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/306841/original/file-20191213-85412-ameqf2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Give yourself options.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/portrait-happy-smiling-boy-choosing-junk-1546212239?src=af63bb21-1c7f-4716-9b8a-700b3dad871f-1-24&studio=1">Shutterstock</a></span>
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<p>But negatively framed implementation intentions (“when I feel like eating chocolate, I will not eat chocolate”) can be counterproductive since people have to suppress a thought (“don’t eat chocolate”). Ironically, trying to suppress a thought actually makes us <a href="https://www.ncbi.nlm.nih.gov/pubmed/3612492">more likely to think about it</a> thereby increasing the risk of habits such as binge eating, smoking and drinking. </p>
<p><a href="https://www.ncbi.nlm.nih.gov/pubmed/20363904">Distraction</a> is another approach that can disrupt habits. Also effective is focusing on the positive aspects of the new habit and the negative aspects <a href="https://psycnet.apa.org/record/2009-22616-003">of the problem habit</a>. </p>
<h2>4. Imagine your future self</h2>
<p>To make better decisions we need to overcome our tendency to prefer rewards now rather than later – psychologists call this our <a href="https://www.youtube.com/watch?v=JzKix2xWmJI">“present bias”</a>. One way to fight this bias is to futureproof our decisions. Our future self tends to be virtuous and adopts long-term goals. In contrast, our present self often pursues short-term, situational goals. There are ways we can workaround this, though. </p>
<p>For example, setting up a direct debit into a savings account is effective because it’s a one-off decision. In contrast, eating decisions are problematic because of their high frequency. Often our food choices are compromised by circumstance or situational stresses. Planning ahead is therefore important because we regress to our old habits <a href="https://www.sciencedirect.com/science/article/abs/pii/S0749597803001043">when put under pressure</a>.</p>
<h2>5. Set goals and deadlines</h2>
<p>Setting self-imposed deadlines or goals helps us change our behaviour <a href="https://erationality.media.mit.edu/papers/dan/eRational/Dynamic%20preferences/deadlines.pdf">and form new habits</a>. For example, say you are going to save a certain amount of money every month. Deadlines work particularly well when tied to self-imposed <a href="https://pdfs.semanticscholar.org/ebd9/b0146b8ac12a54b13d290362a475b9c7c52d.pdf">rewards and penalties</a> for good behaviour. </p>
<p>Another way to increase motivation is to harness the power of peer pressure. Websites <a href="https://www.stickk.com/">such as stickK</a> allow you to broadcast your commitments online so that friends can follow your progress via the website or on social media (for example, “I will lose a stone in weight by May”). These are highly visible commitments and tie our colours to the mast. A financial forfeit for failure (preferably payable to a cause you oppose) can add extra motivation.</p><img src="https://counter.theconversation.com/content/128816/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The trick is changing our actual behaviour, as well as our intentions.Brian Harman, Lecturer in Marketing, De Montfort UniversityJanine Bosak, Professor in Organisational Psychology, Dublin City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1250302019-10-30T18:59:28Z2019-10-30T18:59:28ZWhat a boycott that never happened can reveal about blame, consumer psychology and the free-market system<figure><img src="https://images.theconversation.com/files/298778/original/file-20191025-173542-5b3mfx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">United Airlines officials testify after United physically forced a customer off a Chicago flight.</span> <span class="attribution"><a class="source" href="https://pictures.reuters.com/CS.aspx?VP3=SearchResult&VBID=2C0FCIMD31DA0&SMLS=1&RW=1302&RH=744#/SearchResult&VBID=2C0FCIMD31DA0&SMLS=1&RW=1302&RH=744&PN=2&POPUPPN=89&POPUPIID=2C0FQE30ZMQWF">Reuters/Kevin Lamarque</a></span></figcaption></figure><p>Imagine that a passenger is asked to leave an overbooked flight. When the passenger refuses, saying he is needed for important work, he is physically assaulted and dragged off the flight.</p>
<p>Imagine that the American public directed its anger not at the airline, but at the passenger.</p>
<p>The above incident happened in <a href="https://time.com/4738429/david-dao-united-airlines/">real life</a>. <a href="https://www.businessinsider.com/united-airlines-passenger-dragged-from-flight-name-2017-4">David Dao</a>, a doctor, was <a href="https://www.forbes.com/sites/michaelgoldstein/2017/12/20/biggest-travel-story-of-2017-the-bumping-and-beating-of-doctor-david-dao/#388ba701f61f">flying United Airlines</a> when this took place in 2017.</p>
<p><a href="https://business.uoregon.edu/sites/business1.uoregon.edu/files/faculty/cv/troy-campbell-cv.pdf">We are scholars</a> <a href="https://www.pdx.edu/sba/sites/www.pdx.edu.sba/files/BrandonReichCV%20(June%202019).pdf">of marketing and consumer psychology</a>, and <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/jcpy.1124">we’ve researched</a> how the U.S. culture of victim blaming <a href="https://www.businessinsider.com/united-airlines-ceo-passenger-dragging-never-blamed-employees-2017-9">prevents punitive action</a>, <a href="https://www.nytimes.com/2017/07/27/business/how-united-weathered-a-firestorm.html">such as a boycott</a>, against companies.</p>
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<figcaption><span class="caption">The video showing David Dao getting dragged off the plane went viral.</span></figcaption>
</figure>
<h2>Consumers are angry – but not at United</h2>
<p>Initially, <a href="https://www.cnn.com/2017/04/11/travel/united-customer-dragged-off-overbooked-flight/index.html">consumers were outraged</a>. How could United possibly justify violence to enforce this unfair – and <a href="https://www.inc.com/cynthia-than/the-controversial-united-airlines-flight-was-not-overbooked-and-why-that-matters.html">arguably illegal</a> – practice?</p>
<p>But as quickly as they were ignited, the flames of outrage seemed to be partly doused with <a href="https://abc7chicago.com/news/who-is-the-kentucky-doctor-dragged-from-the-united-plane/1861682/">new information</a> about the victim of the incident. Dao had allegedly <a href="https://www.courier-journal.com/story/news/local/2017/04/11/david-dao-passenger-removed-united-flight-doctor-troubled-past/100318320/?hootPostID=d36ec6c0be57d7c0080839c4936d4285">traded prescription drugs</a> for <a href="https://www.dailymail.co.uk/news/article-4401980/Dr-dragged-United-swapped-drugs-secret-gay-sex.html">sex with one of his patients</a>. Dao was <a href="https://fox13now.com/2017/04/11/doctor-dragged-off-flight-previously-lost-medical-license-for-drug-crimes/">convicted of several charges, though he denies others</a>.</p>
<p>And it seemed like for some, United was off the hook. In fact, <a href="https://www.nytimes.com/2017/07/18/business/united-airlines-profit-earnings.html">United’s earnings even went up</a> in that fiscal quarter.</p>
<p>Some consumers <a href="https://www.tandfonline.com/doi/full/10.1080/1047840X.2014.877340">shifted the blame</a> for the incident away from United and toward the victim. The new information about Dao’s past behavior had no logical bearing on the cause of the United incident, and so should have no impact on consumers’ judgments of blame.</p>
<p>“Should,” of course, is the operative word.</p>
<p>A <a href="https://brill.com/view/journals/jocc/8/1-2/article-p179_10.xml">large body of research</a> in psychology has consistently shown that people don’t always assign blame rationally. In fact, we often use <a href="https://psycnet.apa.org/buy/2000-08364-007">irrelevant information</a> about someone’s personal characteristics when making blame judgments.</p>
<h2>Polling the public</h2>
<p>With this background in mind, we conducted some <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/jcpy.1124">research of our own</a>.</p>
<p>A self-regulating <a href="https://repository.uchastings.edu/cgi/viewcontent.cgi?article=1023&context=traynor_scholarship_pub">free-market system</a> works when consumers punish companies that deliver faulty products or services, especially when this failure causes physical harm to other consumers. Our core prediction was that consumers would fail to live up to this obligation in situations like the one we described.</p>
<p>We posed as pollsters asking passersby for their opinion about events in the news. We gave those who obliged a synopsis of the David Dao incident and asked whether or not they were familiar with a few of the related details. For half of the participants, one of those details related Dao’s past immoral behavior. For the other half, this detail was omitted.</p>
<p>We then asked each participant if they’d be willing to sign a petition against United, effectively punishing the company for its wrongful actions. Sure enough, a subtle mention of Dao’s unrelated transgression was enough to reduce the signing rate by almost 20%.</p>
<p>While a majority signed the petition in both groups – 66% when Dao’s alleged transgression was mentioned and 85% when it was not – it did seem that consumers used this information to decide whether or not to take action.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=422&fit=crop&dpr=1 600w, https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=422&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=422&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=531&fit=crop&dpr=1 754w, https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=531&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/298776/original/file-20191025-173579-13uh0hx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=531&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">United’s earnings went up in the same fiscal quarter as the Dao incident.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Earns-Airlines/7deff0405e6f4a58b71b4546894a6c90/60/0">AP Photo/Julio Cortez</a></span>
</figcaption>
</figure>
<h2>Playing the blame game</h2>
<p>This initial field experiment supported our hypothesis, but we also wanted to know why this pattern might be emerging, and if it would hold in other product-failure contexts.</p>
<p>In a series of follow-up experiments, we created a number of scenarios about product-failure situations and tested consumers’ responses to them. The contexts ranged from burn-related injuries caused by a faulty travel mug to a car accident resulting from failed brakes. In all of these scenarios, we made it explicitly clear that the product was faulty. </p>
<p>Much like in our field experiment, we manipulated whether the victim – a fictional character – was a good or bad person in a completely unrelated way.</p>
<p>For example, in the travel mug scenario, the coffee-burn victim was a bank employee who found extra money in his bank drawer. He decided to either keep the money for himself or tell his manager about it. We then described the victim’s experience with the faulty travel mug.</p>
<p>We used rating scales to measure consumers’ judgments of blame for the incident and their intentions to punish the company, either through spreading negative word-of-mouth or supporting a lawsuit. In every scenario, the “bad” victim was blamed to a significantly greater degree than the “good” victim, which in turn reduced consumers’ stated intentions to punish the company.</p>
<p>So it does seem that blame, based on irrelevant personal characteristics, is at the root of the David Dao incident and others like it.</p>
<p>But there’s one more wrinkle to the story.</p>
<h2>A just world</h2>
<p>A prominent theory in social psychology is that most humans have a fundamental <a href="https://www.springer.com/gp/book/9780306404955">need to believe that the world is just</a>. It is too frightening for most people to believe that bad things can happen to good people and vice versa.</p>
<p>Combined with what psychologists know about blame, this suggests that if someone is a morally bad person, we’re more likely to tell ourselves that they deserve to suffer and therefore blame them for things that aren’t their fault.</p>
<p>In our follow-up experiments, we used an additional rating scale containing questions about the extent to which the victim seemed like someone who deserves to suffer in general or deserves bad luck.</p>
<p>Perhaps unsurprisingly, in all of our follow-up scenarios, the “bad” victim was seen as more deserving of suffering than the “good” victim. But more interestingly, our analysis showed that these deservingness ratings predicted blame, explaining why consumers blamed “bad” victims for faulty products in all of our follow-up experiments.</p>
<p>As consumers, it’s difficult to change our psychological responses to people, companies, and other events in the world. But hopefully our research and <a href="https://journals.sagepub.com/doi/abs/10.1177/0886260509354503">that of others</a> can serve as a reminder that blame should be about causality, and that victims rarely – if ever – are the true cause of their own suffering.</p><img src="https://counter.theconversation.com/content/125030/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>United Airlines faced a public relations nightmare when they dragged a man off a flight in 2017 – until the blame shifted back to the victim.Brandon Reich, Assistant Professor of Marketing, Portland State UniversityTroy Campbell, Assistant Professor of Marketing, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1230592019-09-20T12:36:43Z2019-09-20T12:36:43ZIt’s high time someone studied marijuana taxes – so we did<figure><img src="https://images.theconversation.com/files/293047/original/file-20190918-187945-1gtv7pw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bill Blazina, 73, uses a high-potency marijuana oil as a medical marijuana patient, but he can't afford it at a recreational marijuana store.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Medical-Marijuana-Shrinking-Market/aae3311d6daf430b83e455ff2a572b43/3/0">AP Photo/Gillian Flaccus</a></span></figcaption></figure><p>Consumers don’t seem to mind <a href="https://taxfoundation.org/americans-paying-more-taxes-food-clothing-and-shelter/">paying sales taxes</a> on things like food and clothing. Marijuana may be a different story.</p>
<p>As marijuana taxes are imposed <a href="https://www.forbes.com/sites/tomangell/2018/12/26/these-states-are-most-likely-to-legalize-marijuana-in-2019/#1c874acb5add">in more states</a>, many <a href="https://www.phoenixnewtimes.com/news/arizonans-could-cross-states-lines-for-legal-marijuana-but-face-risk-in-bringing-it-home-8827808">recreational marijuana users might cross interstate borders</a> to avoid them or even <a href="https://link.springer.com/article/10.1007%2Fs10797-019-09556-7#Fig5">hoard stocks of weed</a> in anticipation of them. If state governments don’t adjust to such behavior, it will reduce revenue and most likely increase overall marijuana consumption.</p>
<p>Not many states have studied the implications of pot taxes on consumer behavior. <a href="https://liberalarts.oregonstate.edu/spp/econ/victor-j-tremblay">So</a> <a href="https://liberalarts.oregonstate.edu/users/paul-thompson">we</a> <a href="https://link.springer.com/article/10.1007%2Fs10797-019-09556-7">did</a>.</p>
<p>I’m a <a href="https://www.linkedin.com/in/salarppolicy/">Ph.D. student of public policy</a>, and <a href="https://link.springer.com/article/10.1007%2Fs10797-019-09556-7">my colleagues and I studied</a> data <a href="https://link.springer.com/article/10.1007%2Fs10797-019-09556-7#Notes">from marijuana users</a> in Oregon.</p>
<p>We wanted to see what the economic consequences of marijuana taxes are on this <a href="https://www.washingtonpost.com/national/2018/01/10/study-legal-marijuana-could-generate-more-than-132-billion-in-federal-tax-revenue-and-1-million-jobs/">billion-dollar industry</a>. Also, we wanted to help local governments to understand them – at a time when states are increasingly relying on these new sources of revenue to <a href="https://www.oregonlive.com/marijuana/2017/10/oregon_pays_out_85_million_in_1.html">pay for education, health and law enforcement</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/291362/original/file-20190907-175696-12v6tzm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Marijuana plants in Oregon.</span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<h2>Changing consumer behavior</h2>
<p>Although marijuana is considered a Schedule I controlled substance by the U.S. government, meaning <a href="https://www.drugs.com/csa-schedule.html">the drug has a high potential for abuse</a> and is illegal to possess, <a href="https://www.businessinsider.com/legal-marijuana-states-2018-1">10 states and the District of Columbia</a> have legalized the possession or sale of recreational marijuana.</p>
<p>As of 2019, <a href="https://www.businessinsider.com/legal-marijuana-states-2018-1">33 states have permitted medical</a> marijuana or decriminalized marijuana possession, and <a href="https://news.gallup.com/poll/243908/two-three-americans-support-legalizing-marijuana.aspx">most Americans</a> support legalization.</p>
<p>Each state with a legalized market has <a href="https://taxfoundation.org/marijuana-taxes-state/">imposed a tax on marijuana transactions</a>. Starting on Jan. 4, 2016, Oregon officials levied <a href="https://azmarijuana.com/marijuana-news/oregons-25-recreational-marijuana-tax-begins-in-2016/">a 25% tax</a> on recreational marijuana, which generated <a href="https://news.medicalmarijuanainc.com/oregons-actual-tax-revenue-marijuana-sales-blowing-away-original-estimates/">US$60.2 million in tax revenue</a> that year alone.</p>
<p><a href="https://knowledge.wharton.upenn.edu/article/do-sin-taxes-really-change-consumer-behavior/">Research suggests</a> that taxes – particularly <a href="https://www.mercatus.org/publications/government-spending/taxing-sin">taxes on substances or activities considered harmful</a>, such as gambling, alcoholic beverages or sugary soft drinks – alter consumer behavior.</p>
<p>If consumers foresee tax changes, they may purchase and store large quantities before implementation of a tax. <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12090">This may lower</a> overall revenue raised by the product temporarily until consumers use their stores.</p>
<p>Cross-border purchasing is likely to be a more permanent issue regarding marijuana taxation, especially in states like Oregon, where <a href="https://www.nationsonline.org/oneworld/map/USA/oregon_map.htm">large population centers are located near borders</a> of <a href="https://disa.com/map-of-marijuana-legality-by-state">other states that have also legalized</a> marijuana sales – making it easy to avoid taxes with a quick road trip.</p>
<p>Many people shifted to <a href="https://gov.oregonlive.com/bill/2016/SB1601/">untaxed medical marijuana</a> immediately <a href="https://www.oregon.gov/olcc/marijuana/Documents/Measure91.pdf">after marijuana legalization passed in Oregon</a> as you can see by the <a href="https://www.oregon.gov/oha/PH/DISEASESCONDITIONS/CHRONICDISEASE/MEDICALMARIJUANAPROGRAM/Documents/OMMP%20Statistic%20Snapshot%20-%2004-2019.pdf">rise of medical marijuana applications post-taxation</a>. Medical marijuana patients may also buy untaxed marijuana for friends and family, further cutting into the revenue raised.</p>
<p><iframe id="qA3sB" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/qA3sB/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>What comes next</h2>
<p>So what can public officials do?</p>
<p>One solution is to coordinate tax rates across states to avoid cross-border purchasing.</p>
<p>Our study also suggests that health officials need to work around medical marijuana users who circumvent taxes faced by recreational users. Connecting dispensaries electronically and making the purchasing cards computer-readable to keep track of marijuana sales could help cut down on this practice.</p>
<p>[ <em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/123059/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Muhammad Salar Khan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Pot taxes will change the ability of some to purchase recreational marijuana.Muhammad Salar Khan, Graduate Research Assistant, George Mason UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1112592019-02-17T18:56:56Z2019-02-17T18:56:56ZThe decoy effect: how you are influenced to choose without really knowing it<figure><img src="https://images.theconversation.com/files/257627/original/file-20190207-174890-1btlu70.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The decoy effect is the phenomenon where consumers swap their preference between two options when presented with a third option.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Price is the <a href="https://www.forbes.com/sites/keithlevy/2011/11/30/price-marketings-most-delicate-p/#62a2a8ed397f">most delicate element</a> of the marketing mix, and much thought goes into setting prices to nudge us towards spending more. </p>
<p>There’s one particularly cunning type of pricing strategy that marketers use to get you to switch your choice from one option to a more expensive or profitable one. </p>
<p>It’s called the <a href="https://www.intelligenteconomist.com/decoy-effect/">decoy effect</a>.</p>
<p>Imagine you are shopping for a Nutribullet blender. You see two options. The cheaper one, at $89, promotes 900 watts of power and a five-piece accessory kit. The more expensive one, at $149, is 1,200 watts and has 12 accessories. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=447&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=447&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=447&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=562&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=562&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259209/original/file-20190215-1745-1120dly.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=562&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p>Which one you choose will depend on some assessment of their relative value for money. It’s not immediately apparent, though, that the more expensive option is better value. It’s slightly less than 35% more powerful but costs nearly 70% more. It does have more than twice as many plastic accessories, but what are they worth?</p>
<p>Now consider the two in light of a third option.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=295&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=295&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=295&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=370&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=370&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259210/original/file-20190215-1751-jgbfa2.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=370&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p>This one, for $125, offers 1,000 watts and nine accessories. It enables you to make what feels like a more considered comparison. For $36 more than the cheaper option, you get four more accessories and an extra 100 watts of power. But if you spend just $24 extra, you get a further three accessories and 200 watts more power. Bargain!</p>
<p>You have just experienced the decoy effect. </p>
<h2>Asymmetric dominance</h2>
<p>The decoy effect is defined as the phenomenon whereby consumers change their preference between two options when presented with a third option – the “decoy” – that is “asymmetrically dominated”. It is also referred to as the “attraction effect” or “asymmetric dominance effect”.</p>
<p>What asymmetric domination means is the decoy is priced to make one of the other options much more attractive. It is “dominated” in terms of perceived value (quantity, quality, extra features and so on). The decoy is not intended to sell, just to nudge consumers away from the “competitor” and towards the “target” – usually the more expensive or profitable option. </p>
<p>The effect was first described by academics Joel Huber, John Payne and Christopher Puto <a href="https://apps.dtic.mil/dtic/tr/fulltext/u2/a101132.pdf">in a paper</a> presented to a conference in 1981 (and later published in the <a href="http://dx.doi.org/10.1086/208899">Journal of Consumer Research</a> in 1982). </p>
<p>They demonstrated the effect through experiments in which participants (university students) were asked to makes choices in scenarios involving beer, cars, restaurants, lottery tickets, films and television sets. </p>
<p>In each product scenario participants first had to choose between two options. Then they were given a third option – a decoy designed to nudge them toward picking the target over the competitor. In every case except the lottery tickets the decoy successfully increased the probability of the target being chosen. </p>
<p>These findings were, in marketing terms, revolutionary. They challenged established doctrines – known as the “<a href="https://www.researchgate.net/publication/227712025_The_Similarity_Heuristic">similarity heuristic</a>” and the “<a href="https://www.researchgate.net/publication/317954913_Assortment_Optimization_under_the_General_Luce_Model">regularity condition</a>” – that a new product will take away market share from an existing product and cannot increase the probability of a customer choosing the original product. </p>
<h2>How decoys work</h2>
<p>When consumers are faced with many alternatives, they often experience choice overload – what psychologist Barry Schwartz has termed the <a href="https://www.scientificamerican.com/article/the-tyranny-of-choice/">tyranny</a> or <a href="https://psmag.com/social-justice/paradox-choice-barry-schwartz-psychology-10-years-later-96706">paradox of choice</a>. Multiple behavioural experiments <a href="https://www.sciencedirect.com/science/article/abs/pii/S1057740814000916">have consistently demonstrated</a> that greater choice complexity increases anxiety and hinders decision-making. </p>
<p>In an attempt to reduce this anxiety, consumers tend to simplify the process by selecting only a couple of criteria (say price and quantity) to determine the best value for money. </p>
<p>Through manipulating these key choice attributes, a decoy steers you in a particular direction while giving you the feeling you are making a rational, informed choice. </p>
<p>The decoy effect is thus a form of “<a href="https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/nudge/">nudging</a>” – defined by Richard Thaler and Cass Sunstein (the pioneers of nudge theory) as “any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options”. Not all nudging is manipulative, and some argue that even manipulative nudging can be <a href="https://blogs.lse.ac.uk/politicsandpolicy/nudges-manipulate-except-when-they-dont/">justified if the ends are noble</a>. It has proven useful in social marketing to encourage people <a href="https://www.researchgate.net/publication/319023957_Nudging_and_Boosting_Steering_or_Empowering_Good_Decisions">to make good decisions</a> such as using less energy, eating healthier or becoming organ donors. </p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/nudging-people-towards-changing-behaviour-what-works-and-why-not-27576">'Nudging' people towards changing behaviour: what works and why (not)?</a>
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<h2>In the market</h2>
<p>We see decoy pricing in many areas. </p>
<p>A decade ago behavioural economist <a href="http://danariely.com/">Dan Ariely</a> spoke about his fascination with the pricing structure of <a href="https://www.economist.com/democracy-in-america/2009/05/22/the-importance-of-irrelevant-alternatives">The Economist</a> and how he tested the options on 100 of his students.</p>
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<p>In one scenario the students had a choice of a web-only subscription or a print-only subscription for twice the price; 68% chose the cheaper web-only option.</p>
<p>They were given a third option – a web-and-print subscription for the same price as the print-only option. Now just 16% chose the cheaper option, with 84% opting for the obviously better combined option. </p>
<p>In this second scenario the print-only option had become the decoy and the combined option the target. Even The Economist was intrigued by Ariely’s finding, publishing a story about it entitled “<a href="https://www.economist.com/democracy-in-america/2009/05/22/the-importance-of-irrelevant-alternatives">The importance of irrelevant alternatives</a>”.</p>
<p>Subscription pricing for <a href="https://www.theaustralian.com.au/">The Australian</a> today replicates this “irrelevant alternative”, though in a slightly different way to the pricing architecture Ariely examined.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=580&fit=crop&dpr=1 600w, https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=580&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=580&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=729&fit=crop&dpr=1 754w, https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=729&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/259378/original/file-20190217-56215-12lo0e8.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=729&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p>Why would you choose the digital-only subscription when you can get the weekend paper delivered for no extra cost? </p>
<p>In this instance, the digital-only option is the decoy and the digital+weekend paper option is the target. The intention appears to be to discourage you from choosing the more expensive six-day paper option. Because that option is not necessarily more profitable for the company. What traditionally made print editions profitable, despite the cost of printing and distribution, was the advertising they carried. That’s <a href="https://home.kpmg/content/dam/kpmg/co/pdf/co-17-01-08-tmt-stop-the-presses.pdf">no longer the case</a>. It makes sense to encourage subscribers to move online.</p>
<p>Not all decoys are so conspicuous. In fact the decoy effect may be extremely effective by being quite subtle.</p>
<p>Consider the <a href="https://www.aussieprices.com.au/food/boost-juice-menu-prices/">price of drinks</a> at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. </p>
<p>Which would you buy?</p>
<p>If you’re good at doing maths in your head, or committed enough to use a calculator, you might work out that the medium is slightly better value than the small, and the large better value again. </p>
<p>But the pricing of the medium option – $1 more than the small but just 40 cents cheaper than the large – is designed to be asymmetrically dominated, steering you to see the biggest drink as the best value for money. </p>
<p>So have you just made the sensible choice, or been manipulated to spend more on a drink larger than you needed?</p><img src="https://counter.theconversation.com/content/111259/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Most pricing structures nudge us to spend more. But there’s a particularly cunning type of pricing that can get us to swap our preference from a cheaper to a more expensive option.Gary Mortimer, Associate Professor in Marketing and Consumer Behaviour, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1067522018-11-19T19:40:26Z2018-11-19T19:40:26ZNot everyone wants their donations touted on Facebook or plastered on walls<figure><img src="https://images.theconversation.com/files/245975/original/file-20181116-194503-zbwsl0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Social media is one avenue for proclaiming generosity.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/give-aid-charity-support-welfare-concept-387653227">Rawpixel/Shutterstock.com</a></span></figcaption></figure><p>I recently made a donation on a friend’s GoFundMe page. I paused over the box to hide my name before clicking it. Then as I finished up, the website asked me if I wanted to share my donation on Facebook. I clicked “skip.” </p>
<p>I also have a team in the <a href="http://act.alz.org/site/PageServer?pagename=walk_website_help">Walk to End Alzheimer’s</a> in honor of my mother. Every time I donate online, the website prompts me to announce my gift on social media. I’ll share our team’s fundraising page on Facebook but not my own donation. Most people who donate to my team don’t share their donations on social media either.</p>
<p>Although these requests to flaunt donations are becoming extremely common, not all donations are trumpeted on Facebook or Twitter or heralded in programs for concerts and school reunions. Some are completely anonymous.</p>
<p>I <a href="https://scholar.google.com/citations?hl=en&user=ZiM25AcAAAAJ">study how someone’s identity affects their charitable giving</a>. The twinge of self-consciousness I feel when asked to publicize my donation on social media or have my name revealed made me wonder why some donors broadcast their good deeds while others remain silent. </p>
<h2>Moral identities</h2>
<p>I often consider the role of what consumer psychologists call “<a href="http://psycnet.apa.org/buy/2002-08203-015">moral identity</a>” – the extent to which someone values moral traits, such as kindness, generosity, fairness, tenacity and honesty, in themselves as well as in how others see them.</p>
<p>So while some people may feel good just knowing they helped someone even if no one else knows, others feel that they are a kind, giving person only when others find out about their good acts. </p>
<p>When fundraisers offer to list donors’ names in a school graduation program, prominently place them on the wall of a new building or mention them on a website, it gets easier to reach the people in the second group.</p>
<h2>Getting recognized</h2>
<p>To <a href="https://journals.sagepub.com/doi/abs/10.1509/jm.11.0477">study this phenomenon</a>, I teamed up with two other marketing scholars, <a href="https://business.rice.edu/person/vikas-mittal">Vikas Mittal</a> at Rice University and <a href="https://www.sauder.ubc.ca/Faculty/People/Faculty_Members/Aquino_Karl">Karl Aquino</a> at the University of British Columbia.</p>
<p>We conducted an online survey of 197 people. Just as they were finishing another survey on a different topic, we asked people to tell us how important traits like compassion and helpfulness are to them personally and in their daily activities that are visible to others. People also answered a variety of other questions on another topic.</p>
<p>We then asked them to volunteer five minutes of their time to complete a survey for an educational nonprofit. Half were told that in exchange for completing the survey, their name would be listed on the nonprofit’s website. The other half weren’t told this. </p>
<h2>Some people respond differently</h2>
<p>People can donate their time or money, as well as items like clothes or food. Anything that helps others can make givers feel like they are the kind, caring person they desire to be or want others to see.</p>
<p>The prospect of being recognized for taking five minutes out of their days to do something voluntarily made a subset of participants more likely to volunteer: those who said their everyday hobbies and interests show traits like kindness and fairness.</p>
<p>For these individuals, 21 percent volunteered when they knew their name would be listed on the nonprofit’s website. Only 6 percent volunteered when they were not told about this recognition. </p>
<p>Of those who place a lot of importance on being moral, 21 percent gave their time when they didn’t know they could have their name listed on the website. When these people knew recognition was an option, their likelihood of volunteering only increased slightly, to 24 percent. </p>
<p>This told us that only those people who want their moral traits to be expressed to others care about whether their donations can be seen. </p>
<p>Not surprisingly, a smaller share of those who did not think it was important to be caring – only 13 percent – volunteered to take the survey.</p>
<p><iframe id="cYaK4" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/cYaK4/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Catering to a minority</h2>
<p>We estimated that only one in five people cares about showing generosity to others without feeling these characteristics really matter to themselves. They are more likely to donate when they can be recognized as generous. What about the other 80 percent? </p>
<p>About 50 percent tend to place a high enough internal value on being moral to consider donating regardless of whether others hear about it. The remaining 30 percent aren’t inclined to donate no matter what.</p>
<p>So should nonprofits cater to this minority and offer ways for donors to be recognized for giving? I’d say yes. </p>
<p>Otherwise, they could lose out on donations from these donors, who are approximately 20 percent of all people but constitute a bigger share of potential givers. </p>
<p>At the same time, I believe charities should not presume that most donors want or welcome this opportunity to be recognized every time they support a cause.</p><img src="https://counter.theconversation.com/content/106752/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Winterich does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Some people are more inclined to give when they know their friends will find out.Karen Winterich, Professor of Marketing, Frank and Mary Smeal Research Fellow, Penn StateLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/908962018-01-30T14:07:35Z2018-01-30T14:07:35ZThe Ikea effect: how Ingvar Kamprad’s company changed the way we shop<p>Ingvar Kamprad, who started Ikea as a teenager, has died at the age of 91. He started with stationery and stockings, but went on to build one of the world’s biggest furniture companies. And the way he did it has revolutionised how retailers operate. </p>
<p>There are two facets of modern life that we have Ikea to thank for: flat-pack furniture and a <a href="https://m.ikea.com/ms/en_MY/img/store_images/default_store/Map.jpg">shop layout</a> that gets you buying more of its products than you initially intended to. Both are principles that a number of other companies have put to good use.</p>
<p>Ikea first brought out its now signature style of flat-pack furniture in the 1950s. Whether you love or loathe this concept, it was a <a href="https://theconversation.com/how-ikea-used-affordable-and-innovative-design-to-transform-the-homes-of-everyday-consumers-86069">stroke of genius</a> and a effective way of making the masses value the brand. There are the <a href="https://www.fastcodesign.com/3057837/the-man-behind-ikeas-world-conquering-flat-pack-design">obvious aspects</a> of cost efficiency and the practicality of shipping. But flat-pack furniture also has an important subconscious influence on consumers. </p>
<p>When Ikea made the switch away from selling furniture that was already assembled, it was most likely unaware of how it would influence its consumers. Yet scientists have since managed to pinpoint why consumers simply can’t get enough of building their own furniture. The simple act of touching products (and what better way to ensure touch based interaction than through assembling a piece of furniture) can increase your <a href="http://www.tandfonline.com/doi/abs/10.1080/10350330.2011.591996http:/www.tandfonline.com/doi/abs/10.1080/10350330.2011.591996">overall perceived value</a> of the product. Couple this with the fact that the more effort a consumer has to put into building something the more they like it – you have an undoubtedly winning formula. </p>
<p><a href="https://www.sciencedirect.com/science/article/pii/S1057740811000829">Tests have shown</a> that the actual act of putting something together (even though there may be sweat, swearing and tears involved) so that it becomes a complete object generates a much more favourable perception of that object than it would purchasing it in a completed form. The phenomenon is known as <a href="http://www.hbs.edu/faculty/Publication%20Files/11-091.pdf">the Ikea effect</a>.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203988/original/file-20180130-107683-1smm8qs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">It’ll be worth it in the end.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/couple-putting-together-self-assembly-furniture-165133442?src=pExQzO6-2EGlxukAu9SVeA-1-49">shutterstock.com</a></span>
</figcaption>
</figure>
<p>This effect is further enhanced by the fact that touch itself is <a href="https://www.ncbi.nlm.nih.gov/pubmed/23538146">neurologically coupled with emotion</a>. This means that when we touch something the emotive part of our brain is activated so that we experience a close connection with the product. Touch creates feelings of ownership and increases the perceived value we have of items. Thus the happy assembler of the flat pack will, once finished, feel proud of their achievement and experiencing feelings of being closely connected to the item.</p>
<h2>Round and round in circles</h2>
<p>The layout of the Ikea stores has also paved the way for a more creative way of thinking about how to guide shoppers. If you have ever visited one of its huge warehouse stores, you may have gone in thinking you were only buying a few items, to find yourself coming out of the store with a trolley full of things. This is because of its circular design and one way system.</p>
<p>This design means you often can’t see what is coming next and fear you’ll miss something you need if you don’t continue all the way along the path. There are potential escape points throughout the store, but that would mean that you will miss several of the sections and rarely consumers are prepared to take that risk. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/203993/original/file-20180130-107679-18uzs5y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">You know you want those tea lights.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/sea-turtle/4524425632/in/photolist-w72AD-7vHLCW-5PV4Ny-byHbv-7TNS7u-3Ro59-CD9yN-7cVKg-7cVK7-b7DNR-6vPmLy-4szaXu-4uE49g-bU5fP-pe2zF-EGDpH-5LhUKD-bU5fS-3Gm8d-3eqFT5-EGDpR-byHbx-byHbw-6VKvUB-tsKg9m-byHbu-byHbt-65v3G-7cVK6-fUsro-N3MDKG-5SLB3Z">sea turtle/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Because you know it may be tricky to revisit a particular item later on, you are inclined to pick it up when you see it and put it in your big trolley. This ensures that the customer touches the product, which in turn again <a href="http://www.anderson.ucla.edu/faculty/suzanne.shu/JCR%2520touch%2520ownership.pdf">generates a psychological sense of ownership over it</a> and decreases the likelihood that it will be put down en route to the tills.</p>
<p>The fact that you can’t see around the next corner also creates a subconscious sense of mystery, <a href="http://journals.sagepub.com/doi/abs/10.1177/0013916587191001">which draws the customer gradually further into the store</a>. Environments perceived to be mysterious usually generate an overall stronger liking and so encourage shoppers to keep walking through the store. And the more you do this, the more likely you are to buy something – especially all the smaller items on display such as candles, napkins and picture frames as they seem cheap compared to the larger more expensive items. </p>
<p>Ikea’s creative ability to tap into the unconsciousness of consumers is undoubtedly a big part of its success – and also why it’s been <a href="http://www.digitalistmag.com/customer-experience/2016/04/11/why-apply-ikea-affect-to-your-business-04134971">copied</a> by many other companies. Even though Ingvar Kamprad is no longer with us, Ikea has inherited from him an ethos of thinking outside of the box to communicate with consumers. It will be interesting to see what follows next.</p><img src="https://counter.theconversation.com/content/90896/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cathrine Jansson-Boyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ingvar Kamprad’s Ikea revolutionised retail by popularising flat-pack furniture and building maze-like stores.Cathrine Jansson-Boyd, Reader in Consumer Psychology, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/877622017-11-29T02:31:26Z2017-11-29T02:31:26ZHow ‘brand you’ came to be<figure><img src="https://images.theconversation.com/files/196456/original/file-20171127-2055-hl7o54.jpg?ixlib=rb-1.1.0&rect=0%2C85%2C2044%2C1440&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Mike Mozart/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><blockquote>
<p>…a person’s name is, to that person, the sweetest and most important sound in any language.</p>
</blockquote>
<p>Dale Carnegie’s line from his bestseller book ‘How to Win Friends and Influence People’ rings especially true in the retail sector.</p>
<p>From packets of <a href="http://mumsgrapevine.com.au/2017/11/personalised-food-labels/">Tim Tams and jars of Vegemite</a> to luxury hand bags, today’s marketing is stamping our names on the things we buy, setting us out as unique individuals. </p>
<p>To get to this point, marketing has moved from a focus on the product itself to the consumer, who they are and finally, how they think. </p>
<p>The power of personalisation can been seen in Coke’s successful, ‘Share a Coke’ campaign. Soft drink manufacturers have been experiencing declining <a href="http://fortune.com/2016/03/29/soda-sales-drop-11th-year">sales</a>, but Coca-Cola was able to break the downward trend. By printing individual names on cans, the company saw a 2.5% increase in total sales and soft-drink volume went up by <a href="http://incitrio.com/cokes-share-a-coke-campaign-an-integrated-marketing-success">0.4%</a>.</p>
<p>Even luxury brands like <a href="http://au.louisvuitton.com/eng-au/stories/personalisation-mon-monogram#the-films">Louis Vuitton</a> and <a href="http://www.montblanc.com/en/customer-service/additional-services.html">Mont Blanc</a> have begun to personalise their products.</p>
<h2>How we got to personalisation in marketing</h2>
<p>The journey from mass production to personalisation has taken more than 100 years. Mass production was popularised between 1910 and 1920 by Henry Ford’s Ford Motor Company. He <a href="https://www.biographyonline.net/business/henry-ford.html">famously said</a>: </p>
<blockquote>
<p>Any customer can have a car painted any colour that he wants so long as it is black.</p>
</blockquote>
<p>Mass production was tied to the <a href="https://managementmania.com/en/production-concept">production concept philosophy</a>. This stated that consumers preferred products that were widely available and inexpensive. To achieve this, the focus was on uniformity, efficiency and mass distribution. </p>
<p>Today, even the most basic of household consumables (for example salt, bottled water, flour) would fail to succeed by employing this simple concept, as even these products have sought to <a href="https://www.forbes.com/sites/larrymyler/2016/11/23/how-differentiation-strategies-can-get-you-to-pay-4400-times-more-for-a-commodity/#4f1b00294413">differentiate</a> in a crowded market. The production concept is now only ever used within the <a href="http://smallbusiness.chron.com/difference-between-product-orientation-production-orientation-16004.html">manufacturing sector</a>. </p>
<p>From the 1930s, as new products flooded the marketplace, marketers turned their attention to communicating, not the low price and availability of their wares, but instead the quality and features. This is called the <a href="http://www.blackwellreference.com/public/tocnode?id=g9780631233176_chunk_g978140510254419_ss1-39">product concept</a>. This held that consumers favoured products that offered different levels of quality, performance or features. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=454&fit=crop&dpr=1 754w, https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=454&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/196457/original/file-20171127-2016-1xysyjh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=454&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Vehicle manufacturer Ford has changed its marketing strategy from just making its products available and cheap.</span>
<span class="attribution"><span class="source">JOHN LLOYD/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>However, the risk of positioning your product based purely on its perceived quality and features, is that your competitor will simply replicate. Take any smartphone manufacturer, such as <a href="http://www.versiondaily.com/the-marketing-strategy-of-apple-a-concise-analysis/">Apple</a>, every 18 month or so, they need to release a new product, with higher quality and more features, to stay ahead of their competitors. </p>
<p>By the 1960s, marketing shifted to the <a href="https://www.thebalance.com/what-is-selling-orientation-2295562">selling concept</a>, where the most successful marketing involved aggressive selling and promotions. This assumed that consumers will either not buy, or not buy enough, of the business’ products unless the business made a substantial effort to stimulate consumers’ interest. It focused on “creating a need”, rather than “<a href="https://insight.kellogg.northwestern.edu/article/walking_the_walk">fulfilling a need</a>” for consumers. </p>
<p>Switch on to any <a href="http://www.broadcastingcable.com/news/news-articles/shopping-channels-less-hard-sell/72660">home shopping television</a> channel to see a good example of this in practice. See, you really didn’t realise you needed that piece of gym equipment with a free set of steak knives. </p>
<p>The simply named <a href="http://marketbusinessnews.com/financial-glossary/market-orientation-definition-meaning">marketing concept</a> challenged these earlier philosophies, holding that brands need to understand their target market in order to create and deliver value.</p>
<h2>Customisation and personalisation</h2>
<p>What’s emerging today is a move away from market segments with many consumers to markets of <a href="http://www.startupdaily.net/2015/08/in-the-future-all-products-will-be-designed-for-a-market-of-one/">one</a>. In other words, moving away from understanding the needs of a group of consumers (and creating standardised value) to creating unique value propositions for one customer through customisation and personalisation.</p>
<p>There is often confusion around these two terms, customisation and personalisation. In simple terms, customisation allows a consumer to make small changes to a product or service, from a discreet set of alternatives. This often happens in automotive manufacturing or consumer electronics, where a customer can customise <a href="http://www.mytoshiba.com.au/products/computers/portege#">their car, PC or notebook</a>. </p>
<p>While customisation deals with small groups of consumers making choices from a set of alternatives, personalisation deals with just one, with unlimited alternatives. </p>
<p><a href="http://www.acrwebsite.org/web/acr-content/640/emotional-attachment-to-brands-the-implications-for-marketers.aspx">Attachment theory</a> explains why consumers desire personalised products. Like human relationships, sometimes consumers form an emotional bond with a brand. Once a strong bond is formed, consumers will become loyal and engage in positive “word-of-mouth” promotion of it. So, how do brands form bonds?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/196459/original/file-20171127-2025-8w399p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A Louis Vuitton handbag cake.</span>
<span class="attribution"><span class="source">Dawn/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<p>To increase this bond, brands need to get personal, and that personalisation needs to be relevant. Within a consumers’ brain lays their <a href="https://medium.com/desk-of-van-schneider/if-you-want-it-you-might-get-it-the-reticular-activating-system-explained-761b6ac14e53">reticular activating system</a>. This filters out irrelevant information, enabling consumers to attend to only important information. </p>
<p>Imagine being at a noisy party, with many conversations. It’s all white noise, until someone mentions a topic that is of particular interest to you. You then tune in, thanks to this part of your brain.</p>
<p>So brands use your name. Whether you see it or hear it, your <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1647299/">name</a>, is one of the easiest sounds for your reticular activating system to hone in on. A product with your name on it creates attachment, and then brands have you for life.</p><img src="https://counter.theconversation.com/content/87762/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Marketing has moved from a focus on the product itself to the consumer, who they are and finally, how they think.Gary Mortimer, Associate Professor, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/844342017-10-26T19:11:54Z2017-10-26T19:11:54ZThe behavioural economics of an A$1,800 iPhone<p>The latest iPhone is going on pre-sale today for the eye-watering price of around A$1,800 for 256GB. But who on earth would pay that, and why is Apple charging so much? The answer comes down to behavioural economics. </p>
<p>By setting prices so high, companies like Apple can extract the most revenue possible. People for whom having the latest technology is important will happily stump up A$1,800. For the rest of us this price will “anchor” what we think the value of the phone is, and as prices drop later it suddenly doesn’t seem so expensive.</p>
<p>Essentially, once Apple has sold the phone to those willing to pay the most for it, it can then capture the rest of us by reducing the price over time. </p>
<h2>Costs and benefits</h2>
<p>If you baulk at a A$1,800 price tag for a smartphone, that’s because you are making decisions on the basis of a concept called “<a href="https://www.researchgate.net/profile/Stavros_Drakopoulos/publication/227345568_The_Historical_Development_of_Hierarchical_Behavior_in_Economic_Thought/links/0f31752e05cac6eb1d000000.pdf">substitutability</a>”. This is drawn from economic psychology and it essentially means you are weighing the costs and benefits of substituting from one smartphone to the next. </p>
<p>In <a href="http://oll.libertyfund.org/titles/marshall-principles-of-economics-8th-ed">traditional economic terms</a>, if you aren’t willing to stump up A$1,800, that’s because the “<a href="http://www.investopedia.com/terms/m/marginalbenefit.asp">marginal benefit</a>” (essentially an increased utility or satisfaction) of upgrading doesn’t yet outweigh the marginal benefit of your current phone (or not even having a phone).</p>
<p>Once the price starts dropping this cost-benefit analysis starts to change. Eventually the marginal benefit of upgrading will be greater than that of your current situation and that’s when you switch. You “substitute”, and only then at a lower price does Apple get you to buy their phone.</p>
<p>But this isn’t how the people camping outside the Apple stores are thinking.</p>
<p>Both <a href="https://www.jstor.org/stable/1809901?seq=13%23page_scan_tab_contents">Herbert Simon</a> and <a href="https://www.aeaweb.org/articles?id=10.1257/000282803322655392">Daniel Kahneman</a> won their Nobel prizes for showing that human beings don’t always make decisions by making “rational” comparisons of pros and cons. Peter Earl <a href="http://www.emeraldinsight.com/doi/pdfplus/10.1108/eb002627">built on their ideas</a>, recognising that we make decisions by following rules, responding to emotion, satisfying needs, and following the dictates of a particular identity.</p>
<p>We see this whenever a product is released with really strong emotional properties. Remember those <a href="http://www.independent.co.uk/arts-entertainment/books/news/harry-potter-and-the-cursed-child-fans-line-up-for-midnight-launch-of-new-jk-rowling-play-a7164671.html">people lining up in the early hours of the morning</a> for the latest Harry Potter? Or those fans <a href="http://www.huffingtonpost.com.au/entry/star-wars-fans-are-camping-out-a-week-before-the-premiere_us_56686fc0e4b0f290e5218495">lining up for days</a> to get tickets for the latest Star Wars film? Same thing. </p>
<p>This happens because they <em>need</em> the product. There’s an emotional connection, it’s part of their identity, and they aren’t thinking about it in terms of costs and benefits. People even speak of a “<a href="http://www.bbc.com/news/magazine-15194365">cult of Jobs</a>” (referring to Steve Jobs, Apple’s late CEO).</p>
<p>So the people who are camping outside the Apple store, or who dropped A$1,800 the moment pre-ordering began, aren’t particularly responsive to prices. They’re not making decisions on the basis of substitutability. Instead they’re of a mindset that as long as they can afford the new product, they’ll buy it.</p>
<h2>Anchoring</h2>
<p>So you charge these people as high a price as you can. But once the diehards have the latest iPhone at a very high price, what next? Well, Apple turns attention to the people who <em>are</em> making decisions on the basis of substitutability.</p>
<p>This is when Apple allows telcos like Telstra and Optus and Vodafone to offer plans such that the price (usually buried in the bundle of a phone plan) of the actual phone itself begins to decline as we move toward the next product release. </p>
<p>You have to dig around a bit to find the trend, but you can see it in <a href="http://www.asymco.com/2017/07/31/how-much-will-the-new-iphone-cost/">the price history</a> and the <a href="https://pricespy.co.uk/product.php?pu=3895089">average selling price</a> in various parts of the world. Eventually, the price will be reduced so much that the last few holdouts deem it a worthwhile trade-off. This is just straightforward economics.</p>
<p>Except it’s not actually that straightforward. Apple and companies like it get a hand from a well-known phenomenon in psychology and behavioural economics known as <a href="http://www.economics-ejournal.org/economics/journalarticles/2015-21"><em>anchoring</em></a>.</p>
<p>Essentially, by setting as high a price as possible for the initial release, Apple anchors our thinking about its value and our willingness to pay for it. </p>
<p>While you might be a person who would not have bought a A$1,500 phone, or a A$1,300 phone, both of these prices become more attractive when compared to a A$1,800 phone. Especially so when the A$1,500 cost isn’t paid upfront but buried in a yet smaller monthly fee you pay as part of your phone contract. </p>
<p>An interesting example was provided by Robert Frank in his <a href="https://www.goodreads.com/book/show/5986495-microeconomics-and-behavior">textbook</a>: have you ever noticed how hardware stores like Bunnings put the ludicrously expensive, “bells and whistles” A$5,000 barbecue right at the front of the store as you walk in? Nobody really wants to buy that, but it provides an anchor that makes the somewhat cheaper barbecues in the back more attractive.</p>
<p>This is anchoring at work.</p>
<p>Anchoring changes the thinking around the entire iPhone line. A standard iPhone 7 is currently around A$849 if you buy it straight from Apple, and an iPhone 6s is A$699. It’s even less, or at least appears so, if you get it as part of a plan. So if you’re a couple of models behind, maybe you’ll just upgrade to the next one, not the latest.</p>
<p>But notice again, your thinking about the iPhone 6 and 7 has been framed by the price of the iPhone 8! Is the iPhone 8 <em>really</em> worth that much to you?</p>
<h2>This is the way your mind works</h2>
<p>In short, the high price of the first batch of new products allows a company to maximise revenue from those whose decision making is not guided by substitution. And by anchoring the thinking of those who are considering costs and benefits about the value of the product it also allows the company to extract more revenue than they probably could have otherwise.</p>
<p>Simple yet powerful. Cunningly clever. No wonder we see them do it all the time.</p>
<p>Unfortunately, we’re starting to discover <a href="https://www.cmu.edu/dietrich/sds/docs/loewenstein/WarningAboutNudged.pdf">we aren’t good at avoiding such manipulation</a>, even when we’re aware of it. We’ve known for decades that advertising is manipulating us, and we still seem to be buying cars, computers and other consumer items we probably don’t need.</p>
<p>But still, your best defence is simply to be aware that this is the way your mind works. Knowing this allows you to question whether you really want to pay that much for a new phone. To use <a href="https://www.goodreads.com/book/show/11468377-thinking-fast-and-slow">the terminology of Daniel Kahneman</a>, you need to be aware of the way your mind works so that your rational side is ready to put the brakes on your quick and simple, rules-based side.</p><img src="https://counter.theconversation.com/content/84434/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brendan Markey-Towler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Will you buy the new iPhone straight away?
Or do you buy your smartphone based on its cost-benefits? Either way Apple might be using your own psychology against you.Brendan Markey-Towler, Industry Research Fellow, Australian Institute for Business and Economics and School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.