#29 Reciprocity Bias: Why you should always buy the first coffee
It might not always feel like it, but we’re wired with an inherent desire to cooperate and collaborate with others. That means when someone does us a favour, we can’t help but want to settle the score. In this episode, Mel and Dan consider how this social and emotional drive can direct people to pay for things they didn’t even know they wanted.
Dan: 00:15 Hey, and welcome to Bad Decisions, the podcast that helps us understand why we choose what we choose.
Mel: 00:18 Why we think, what we think.
Dan: 00:20 And how to exploit this stuff for fun and commercial gain. That right there is my co-host, Dr. Mel Weinberg, she's a performance psychologist.
Mel: 00:26 And that over there was my co-host, Dan Monheit co founder of Hardhat.
Dan: 00:30 I'm also the guy that tells Kops to play the music, play the music!
Dan: 00:41 All right. Yo Mel, hey, can I ask you a favour?
Mel: 00:44 Okay.
Dan: 00:45 Let's get right into this. Can you please introduce the heuristic that we are going to be talking about this episode?
Mel: 00:50 I could, what are you going to do for me?
Dan: 00:53 If you introduce the heuristic, I will make this podcast infinitely more fun and entertaining for our listeners.
Mel: 01:04 Sounds like a deal. All right.
Dan: 01:05 What do you got?
Mel: 01:07 The heuristic that we're going to talk about today is the reciprocity bias. The reciprocity bias is the tendency to reciprocate actions that others have done towards us. It's simple in its definition like that, you do something good for me, I'll do something good for you. It's simple as that.
Dan: 01:27 I like it. That's all we've got time for today. No, it's not all we've got time for. We have heaps of time. We have infinity time.
Mel: 01:33 Well, we can talk about the reciprocity bias in so much more detail.
Dan: 01:37 Yeah. It's a big and important one, because really it is the underpinning of most of what we would consider modern society, right?
Mel: 01:45 Yeah. I mean, there are two key reasons, I guess, why this reciprocity bias exists, right? Let me talk you through them. The first is that we have an inherent desire as human beings to cooperate with one another.
Dan: 01:56 Some more than others.
Mel: 01:58 Some more than others, but generally as part of a healthy functioning society, we need to have the system whereby I'll do good things for you and at some point you'll return those favours to me. So putting good things out into the world and expecting that at some point they will be returned, yeah?
Dan: 02:13 This is like the karma bias.
Mel: 02:16 Well, yeah, the whole idea of treat others as you would like to be treated. If I treat you nicely, the whole premise is that at some point in time, you're going to treat me nicely in return. That's part one. Part two, the other reason why we have this reciprocity bias has to do with this inherent desire for balance in our world. So I think about this as this idea of emotional harmony that we seek. Do you like that term? I've just created it.
Dan: 02:40 Emotional harmony, yeah I mean, sounds like a slightly awkward dating app, but we can go with that. What is we call it e-harmony for short?
Mel: 02:48 Oh God, maybe I'll think of something else. However, the idea is that when you do something nice for somebody else, if I do a favour for you, essentially I've put you into this state where you now owe me, right?
Dan: 03:04 Yeah. After watching Prison Break, I see how this works. Now I owe you, yeah.
Mel: 03:09 So I've induced essentially an unpleasant emotional state in you, whereby now you are indebted to me. And this is actually a really good place for me to be in, because I essentially have capitol with you, that if sometime in the future, I'm in trouble or I'm in a situation where I need help, I know that I can call on you because you owe me one. So here's the thing, you're in a situation, an emotionally unpleasant situation, because you feel indebted to me and so you're motivated to try and resolve that emotion, to try and create harmony or emotional balance. And so the only way to do that is for you to even the score and to repay me so that you no longer feel in debt.
Dan: 03:47 Yeah. So the perverse irony here is that you doing a favour for me is actually a real dog act because now I feel bad because you've done something and I've done nothing. Thanks Mel.
Mel: 03:56 This is where we realise the undoing of the human race, essentially is that there is no such thing as altruism. Nothing is for free. If I do nice for you, ultimately it's only because at some point I want to get something in return.
Dan: 04:09 Yeah. And this explains that uneasiness we've all had, whether it's like being out with a friend or going out, when you're grown up and then you go out for family dinners again, and you argue about who's going to pay. And on one hand, the person saying, "Nah, nah, I'll pay, I'll pay, it's fine." Is masquerading like they're doing a really nice thing. But by doing that, everybody else really feels like a loser or awkwardly indebted to this person. It's like, "No, seriously, can you actually just let me pay because I don't want to owe you, friend."
Mel: 04:34 Sometimes Dan, I don't know if you've ever done this and I'm not saying that I have, but what you might do to really take advantage of this situation, is that you might, if you happen to be going out for dinner with a group of people on your payday, when your bank account is all of a sudden is full, you might go, "You know what, I'll take this one." Because next week when you go out for dinner and it's not your pay week, it would actually be beneficial for somebody else to pick up the bill then. But I don't want to talk about manipulating people into-
Dan: 05:01 No, we're not doing that. But it does explain why we feel uncomfortable, if you go got with the same person often and they're constantly buying you coffee, at some point it just feels yuck and icky, which is irrational because you should just feel grateful and wonderful about it.
Mel: 05:15 Isn't it interesting that this whole thing relies on us trusting the other person's intentions. If I don't trust that you're doing something just out of the generosity of your heart, then I'm really going to feel indebted, hey?
Dan: 05:27 Absolutely. And I mean, we did talk about this as being a pretty core attribute of humans. And if I think about one of the biggest differentiators between humans and all other species, is our ability to cooperate with one another at scale and therefore organise ourselves into groups and civilisations and religions and companies and that is all just largely unspoken cooperation between people. And I imagine that the reciprocity bias has a lot to do with that because if you don't trust that other people are going to return your behaviour back to you, the whole thing's just going to fall in a heap.
Mel: 05:59 Well that's right. Nobody wants to be in a society or in a social relationship where they feel like they're being taken advantage of. So that's the downside, that if you continually trust and you don't get anything in return, then you're basically putting yourself out there at a disadvantage. So societies fall apart, relationships don't work, there is no trust in the world.
Dan: 06:16 Yeah. So this feels absolutely right, but I know that feeling is usually not good enough for you. There must be somebody who has done some research to prove that actually we all owe each other. So let's go dig into the archives. What have you got for us?
Mel: 06:28 All right. Hit the research music.
Dan: 06:32 No, I'm the guy that tells Kopel when to do the music. Okay, I thought we established this in the intro.
Mel: 06:36 Could you please?
Dan: 06:37 Kops, could we get some research music please?
Mel: 06:45 So in a study, a 2006 study by Strohmetz and friends/colleagues, they conducted an experiment in a restaurant in New York. And basically what happened was they manipulated participants. Well, I wouldn't say that, I would say that they introduced a manipulation into the study and it happened towards the end of the dining experience at the point where customers are presented with the bill. At random, some of the diners were given a piece of chocolate with the bill, you know that after dinner mint that sits with it.
Dan: 07:18 I'm so full, I'm not that full, I could eat that.
Mel: 07:21 I'll just have that.
Dan: 07:22 Small.
Mel: 07:24 And others weren't, so others were just given the check. And the results of the study suggested that those who were given the piece of chocolate, as long as there was one chocolate for each diner, so you don't just want to have one chocolate for the table, because that's going to make everyone fight over it. But if there were enough chocolates for everybody, then those who were given the piece of chocolate, tipped significantly more than those who were given nothing. And so the implication of that is that they felt the need to return the favour after having been the recipient of the kindness/the chocolate.
Dan: 07:53 Yeah. So I'm not going to lie because I heard about this and I thought this was quite interesting as well, I dived in as well. And when you say significantly more, what I saw that it was like almost 20% more that was tipped just for getting a little chocolate on the dish. Which says to me, if you're a restaurant not giving out chocolates, you got to get your shit together because you're leaving money on the table.
Mel: 08:12 Literally. So it's not just restaurants, we see this all over the place.
Dan: 08:15 All over the place. Yeah, it seems like many, many businesses have worked out that if you can just do a little favour for somebody, even though there is no legal or logical reason why they would have to return that favour, there absolutely feels like there is a moral one. So some of the places where we see this, if you've ever been to a cellar door experience. You go to a cellar door experience at a winery, there's absolutely no obligation for you to buy anything. But I pity the fool that spends half an hour, 45 minutes talking to the owners of the vineyard, learning about the different types of wine, tasting all of the different types of wine and then walking out with nothing. You can't do that, you're terrible person, you are not going to be able to sleep at night if you do that.
Dan: 08:59 We see this in new form retail stores, if you look at the best retailers in the world. So guys like Lulu Lemon who have free yoga classes happening in a lot of their retail spaces, or we see Apple stores putting on events with creators, talking about their work and showcasing films inside Apple stores. All of these create a sense of indebtedness for the person in there absorbing all of that value. And maybe the last example of this I'll give, is the last time I went to buy some running shoes, it was time to actually buy functional shoes, not just shoes that looked cool because I was actually going to use them to run quite a distance. So I thought I better go to one of those proper running shops where they have the real podiatrists and physios and stuff, actually fitting you for the shoes.
Dan: 09:42 And instead of going in and picking a nice pair off the wall, you go in, you have a little chat, they put you on the treadmill, they look at how you walk, they record it, they talk you through it, they give you a proper consultation, try a few different things. And eventually you whittled down hundreds of different shoes they've got into the ones that fit your gait, your heel strike, the way that you like to run. And you know at this point that I could buy these shoes right now, or I could walk out and find them on the internet and probably save $10. And rationally, if we were rational actors, that would be the right thing to do because the time I've just spent is a sunk cost, can't get it back and $10 is $10. But the moral obligation, the indebtedness, the reciprocity that we feel to reward the person who's just spent this time with you, is what keeps the world spinning around.
Mel: 10:25 Wow. Are you saying that people aren't always rational in their decisions?
Dan: 10:29 Occasionally it has occurred to me that people are not always rational in their decisions. In fact, some of the decisions that they make, are even bad.
Mel: 10:37 We should call the podcast after that.
Dan: 10:39 I said, I'd be doing the jokes. I'm doing the jokes.
Mel: 10:42 How about I'll stick with the research because I have another research study for you that speaks to a practical example.
Dan: 10:48 You do the research, I'll do the jokes and the bit where I tell Kops when to play the music.
Mel: 10:52 Right. Stay in your lane Mel, is the message I'm getting. Okay. So we've talked about some examples of where it would be what you call direct reciprocity, where there's a mutually beneficial relationship established where I can do something for you and you can do something for me and we can all work out even. But there are some instances where direct reciprocity isn't actually possible or perhaps appropriate and so there are some alternatives. So here's what we're going to do is we're going to hack the reciprocity bias and just level up a minute. Okay. And so I'm going to use the example in a research study that was done in hotel rooms. So you know when you go into a hotel room and you walk into the bathroom and there's that sign that says, "Help us save the environment, you can show your respect for nature, help save the environment by reusing your towels during your stay." And so they're trying to push you to reuse your towels, but all they've really got to go on is the idea that it's really good for the environment, please do the right thing.
Dan: 11:43 Yeah. And this has always struck a strange chord with me because it's like, "Okay, you guys have got five swimming pools and lush gardens to maintain and you want me to reuse my towels, even though I'm paying you all this money to stay here?" So I see why this is a situation where this direct reciprocity doesn't really work because we've got established guard rails for this relationship. I'm paying you money, you're giving me a service, you can't come back now and try and discourage me from using the service that I'm paying you all this money for.
Mel: 12:07 Right. So some researchers wanted to see if they could apply the reciprocity bias, but in a slightly different way, to help increase the rate at which people would reuse the towels. And so they had three conditions, the first was this standard one, "Please help save the environment, show your respect, reuse your towels during your stay." Okay. The next situation they said, "Partner with us to help save the environment, in exchange for your participation in this program, we at the hotel will donate a percentage of the savings to a nonprofit environmental protection organisation." So they're saying if you reuse your towels, we'll do something good in return, by donating to this third party. And then in the third condition, they had a bit of a different message. The third group were told, "We're doing our part for the environment. We've actually already made a donation on behalf of the hotel and all of its guests. Thanks for playing along with us and reusing your towels during your stay."
Dan: 13:04 The old thank me for the thing I haven't done yet trick.
Mel: 13:08 And would you believe Dan, that when it came to actually looking at the rate at which guests were reusing their towels, they found that that third condition, that what they call reciprocity by proxy condition, they were 50% more likely to reuse their towels than people in the other groups.
Dan: 13:25 Wow. I mean, I love this. This is like when you walk into shops that have a sign that says, "Thank you for not touching the displays." Versus, "Please don't touch the displays." It's such a nicer way of putting it across and no doubt more effective. Because when it says, "Please don't touch the displays." That just tells me to touch the displays, it must be good otherwise, why would they put the sign there?
Mel: 13:45 Something worth touching.
Dan: 13:46 Seriously, I'm touching everything.
Mel: 13:48 And before you know it, you've knocked everything over.
Dan: 13:50 I know, I know.
Mel: 13:51 And then talk about feeling indebted, hey?
Dan: 13:53 They should have just thanked me first for not doing it.
Mel: 13:55 I think it's important that we also highlight that this doesn't always just work for positive actions, the same works in reverse. So we got to be careful with this because there's one thing to return a favour, but the flip side of this is the idea of an eye for an eye, that if you do something to hurt or if you do something negative, the instinct and the tendency is going to be to hurt somebody back to even the score.
Dan: 14:17 This is true. And I think that's a really good segue into getting onto what brands should do about this because I mean, the baseline stuff is pretty obvious. If you're a brand, do something good for people and they'll do something good back. And we see a lot of this, especially in times of crisis, brands going out of their way to do things for people who have suffered at the hands of natural disasters or in more recent times, seeing companies do free food or drinks or dry cleaning for NHS workers, which is fantastic. It seems obvious to just say, "Yeah, do nice things for customers and they will feel indebted to you." But I think there is more to it than that and if we analyse what it takes to make this thing really work, it seems like there are three conditions.
Dan: 14:58 So the first is the brand has to be the first to give. So you can't say, "Oh, if you do this, then we'll do that. If you reuse your towels, we'll make a donation." Because then it's not reciprocity, then it's just a commercial, rational arrangement that the person can decide if they want to participate in or not.
Mel: 15:12 But this is key, we talk about this in social relationships as well, that in order to develop trust, somebody has to be the first to put themselves out there. Somebody has to make themselves vulnerable and as the brand, better that be you.
Dan: 15:23 I guess, it's up to the brand to put it out there first and then tied in with that, is to make it unexpected, and with no stated expectation of return. So it's a thing that you're doing first, it is nice and unanticipated and you are making it very clear that for coming to this yoga class or for me fitting you with these shoes or for me putting on this presentation for your team, I really am not expecting anything back. I just do this purely out of the love of it. So first, it's got to be unexpected, I think the third thing that's really important is that it's got to be personalised. Where if it just feels like this is just a deal for everybody, the level of indebtedness and reciprocity that you feel is going to be far smaller than if it feels like this brand or this person has actually gone out of their way to do something specifically for me.
Mel: 16:10 Yeah. I think these are all really good examples and really key takeaways for how to ensure that you use the reciprocity bias effectively in positive situations. But there's also the idea that sometimes you're trying to balance out a negative emotion.
Dan: 16:23 Exactly. And so I think in the same way when the customer has gone first, and the customer has gone first because they've just been massively inconvenienced by your brand/product/service that has messed up, so they've ordered food to be delivered and the food hasn't turned up. The customer's gone first and this is why it is so infuriating when this happens to you and you call the service provider and they do not feel like they are responding in kind, where all they'll do is refund you for the food that didn't turn up. But what about all the time? What about the ruined occasion? What about all the stress? What about that half hour I've just spent on the phone with you, right? So I think it's really important for a brand perspective to return to a level that is perceived as at least the same indebtedness as the person has gone to for you, if not above and beyond.
Mel: 17:08 And this can be a really hard one to gauge because what you're trying to do is reestablish the emotional harmony, right? I'm going to keep saying that term until it sticks.
Dan: 17:16 E-harmony, for short.
Mel: 17:18 You're looking to reestablish that harmony and so you've got to, if the customer has already taken a hit, actually see where their emotions are at and you've got to gauge what it is that they need to overcome that emotion and to restore balance.
Dan: 17:32 For sure. So try not to get into that situation in the first place, but if you find yourself there, that's how to overcome it. So I reckon that's pretty much a wrap for the reciprocity bias. You got anything else you wanted to kick in Mel?
Mel: 17:42 I think, from the human side of things, that we talk about how you can fall victim to the reciprocity bias in a way and what to do in those situations. But I think it's important to realize that reciprocity is a thing that has continued to spur societies forward. So it's not the thing that we necessarily need to look to overcome so much, but if we recognize if we're feeling that sense of indebtedness, then we're in more of a position to go, "Do I actually want this product? Do I actually want to return the favour?" Or can I actually separate from and go, "You know what, I recognise that I have this instinct to want to buy that wine after having so much of it, but you know what, I don't need to."
Dan: 18:24 Don't be mean. Don't be mean, they've just spent an hour educating you. Anyway, you go your way, I'll go mine. I think the other interesting perverse take away from here, is if you really want to upset somebody, just do something nice for them and walk away.
Mel: 18:36 Create that emotional disharmony and then leave them to figure it out.
Dan: 18:39 You will never buy me a coffee.
Mel: 18:42 Okay.
Dan: 18:43 All right, reciprocity bias, let's put a ribbon on it. What is it?
Mel: 18:47 Reciprocity is the tendency for us to return somebody's positive or negative act with a similar act.
Dan: 18:54 Exactly. And if you're a brand, the ingredients for this, it's not just about being nice, it's about going first, making it unexpected and clear that you don't want anything in return and as personalised as you can. That's going to work wonders.
Mel: 19:08 You know what, Dan, actually remember the start of the episode when you asked me to do that favour for you?
Dan: 19:12 Yeah.
Mel: 19:13 I feel like it's really paid back. I feel like you've really paid back your part of the deal.
Dan: 19:16 Call it even then?
Mel: 19:18 We'll call it even.
Dan: 19:19 All right, see you next time.
Mel: 19:20 Consider the act reciprocated.
Dan: 19:21 Good. All right. Bye.