How to exploit irrational decision-making

by Tom Albrighton 8 March 2010 Copywriting

One of the cornerstones of economics is the theory of rational choice – the idea that people decide how to act by carefully weighing costs against benefits.

In the aftermath of the financial crisis, largely unforeseen by economists, rational choice theory is looking a bit tattered.  The rationality of the big players in finance, as well as the supposedly corrective hand of ‘the market’, has been shown to be an utter fallacy. Investors systematically ignored huge long-term risks, with catastrophic consequences.

Maybe the economists should hang out more with their colleagues over at psychology and organisational behaviour, where researchers have been investigating and documenting flawed decision-making for decades.

For the psychologist or sociologist, a human decision-maker still acts to minimise costs and maximise benefits (or to avoid pain and seek pleasure). But their assessment of those costs and benefits is likely to be hopelessly inaccurate, biased or incomplete.

All this is good news for the copywriter, because these decision-making biases can be exploited in order to nudge a reader towards a buying decision – even though the purchase may not benefit them in any rational or quantifiable way. This post outlines a few of the most common biases that affect our decisions, and how they can be exploited.

Bigness bias

Bigness bias is the tendency to discount relatively small amounts that are measured against much larger amounts. For example, you might regard £1000 as a lot of money to pay for a suit. But to secure a house you really wanted, you wouldn’t hesitate to increase your offer by £1000 – or even £10,000. Context is everything. For example:

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Distinction bias

Viewing options in conjunction makes them seem more different than when they are viewed in isolation. Exploit this by juxtaposing the promoted offering with an alternative option and emphasising some distinction between them. For example:

The EconoHeat offers four different ways to programme your heating – most controllers have just three.

The money illusion

We tend to focus on the face value of money rather than its actual purchasing power. That’s why a £10 cashback offer is so appealing – it’s free money! – whereas a voucher worth £10 is less powerful, and a free saucepan worth £10 even less so (even if we need one). Exploit this bias by quoting as many cash amounts as you possibly can when savings or reductions are concerned (i.e. talk in pounds or dollars, not percentages or fractions).

Reactance

Reactance is the urge to do the opposite of what you’re told. (As the parent of a three-year-old, I can confirm this from extensive field research.)

Right-wingers in the US often harness reactance by suggesting that a ‘liberal mafia’ is destroying America; by doing so, they position voting for the profoundly conservative Republicans as some sort of rebellion.

Apple did something similar with its 1984 and Think Different campaigns, encouraging computer buyers to resist the domination of IBM. Reactance favours new market entrants, minority choices and fringe players, who can turn their underdog status into a virtue in their marketing by inciting customers to rebel against the established order.

Neglect of probability

Human beings are awful at estimating and comparing probabilities. That’s why millions play the Lottery, even though the chance of winning (the ‘positive expected value’, in risk terminology) is infinitesimal. (Premium Bonds are a much better bet.)

This is great news if you’re selling the chance to be, do or acquire something – simply emphasise a desirable upside and people will wildly overestimate their chances of success.

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Déformation professionnelle

Déformation professionnelle is the tendency to view things through the lens of one’s own professional skills or culture. You can exploit it when writing for trade magazines or niche websites – since no-one else is reading, go ahead and trot out the jargon, prejudices and petty concerns that your audience love, and generate instant rapport. (Obviously, you need to be able to do this convincingly, and sound like an ‘insider’, or it will backfire badly.)

Bandwagon theory

This is the tendency to jump on the bandwagon and do what others are doing. I’ve already covered it in my piece on social proof.

Illusion of control

We believe that we can control, or at least influence, outcomes that we clearly cannot. Most superstitions are rooted in this belief, but more ‘sophisticated’ systems of thought such as technical analysis (using charts to predict share price movements) are arguably manifestations of the same thing.

Many distress purchases appeal to the illusion of control. Insurance, for example, is often predicated on the idea that the dark, chaotic world out there can be kept at bay for an affordable monthly payment. Some cosmetic treatments also encourage us to change things that, deep down, we know we can’t.

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