#25 Halo Effect: Why judging a book by its cover is pretty much unavoidable

Why is it that the baddies in cartoons are always so ugly? And why do we assume that handsome people are also going to be charismatic? In this episode, Mel and Dan look at why neat hair and a firm handshake are more important than we could ever imagine.

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Mel: 00:19 Hi, and welcome to Bad Decisions.

Dan: 00:21 The podcast that helps us understand why we choose what we choose.

Mel: 00:23 Why we think what we think.

Dan: 00:25 And how to exploit this stuff for fun and commercial gain.

Mel: 00:27 I'm Dr. Mel Weinberg. I'm a performance psychologist.

Dan: 00:30 And I'm Dan Monheit, co-founder of Hardhat.

Mel: 00:42 So Dan, today I would like to introduce you and our listening audience to a man by the name of Edward Thorndike.

Dan: 00:49 Eddie Thorndike.

Mel: 00:50 You can call him Eddie if you like.

Dan: 00:52 That's a good name. Destined for greatness, with a name like that.

Mel: 00:54 Edward Thorndike. So he was an American psychologist, and he was doing a lot of work in the late 1800s, beginning of the 1900s.

Mel: 01:01 He is typically known for his work around the Law of Effect.

Dan: 01:06 Cool. One of my favourite laws.

Mel: 01:09 Simple. One of your favourite laws. The Law of Effect basically states that any behaviour that's followed by pleasant consequences is likely to be repeated, and any behaviour that's followed by unpleasant consequences is likely to be stopped.

Dan: 01:20 Wait. That's a law?

Mel: 01:21 Yep. Back in the late 1800s, this was huge news.

Dan: 01:26 Was this some sort of a gold rush? Like, to be a psychologist in the 1800s, you could say "I'm famous for the first person that called out that if something has a reward at the end people are going to do it more."

Mel: 01:36 Now look, people typically associate-

Dan: 01:38 Wait, wait. No, no, no. I'm not done. "If somebody gets punished for something, they are less likely to do it."

Mel: 01:43 To do it again, yeah.

Dan: 01:44 "People are going to talk about me, saying this 150 years from now."

Mel: 01:47 But as basic as it may seem, this stuff needed research.

Dan: 01:50 Right.

Mel: 01:50 Right? This needed evidence to back it up.

Dan: 01:52 Because who knows? Maybe putting your hand in fire is a thing that you would just repeat over and over again.

Mel: 01:56 So here's what Thorndike did. Thorndike and the Law of Effect was basically the precursor to what we understand as operant conditioning. So people who have done some sort of undergraduate or high school psychology are pretty familiar with the idea of operant conditioning. This is the idea based around reward and punishment that if we reinforce certain behaviours, people will do them again, and if we punish, they won't. It's really important when it comes to parenting. You love parenting, right?

Dan: 02:20 Training animals and training children.

Mel: 02:21 So Thorndike did this, and typically when we think of operant conditioning, people think of Skinner the Skinner box.

Dan: 02:26 The Skinner box, yeah.

Mel: 02:27 The Skinner box. But before that there was the Thorndike box.

Dan: 02:30 What?

Mel: 02:31 Yeah.

Dan: 02:31 Similar thing, just a less catchy name. The Thorndike box. A box of Thorndikes.

Mel: 02:35 Thorndike was putting... Well, it was a box of cats, or single cats, really.

Dan: 02:40 See where Skinner really took this ... Skinner did dogs, right?

Mel: 02:43 No. Pavlov did dogs.

Dan: 02:45 What did Skinner do?

Mel: 02:45 Skinner did pigeons or rats.

Dan: 02:46 Anyway, okay.

Mel: 02:46 Rats pressing leavers. Sorry. So you know, people think of like rats and stats when they think of like-

Dan: 02:53 People think of that?

Mel: 02:55 Sorry. I think of that, and I've been told that when people talk about what first year psychology is about, it's rats and stats. It's basically doing experiments with animals and research methods.

Dan: 03:03 It's not cats and stats?

Mel: 03:03 Well, it was cats and stats when Thorndike was doing stuff.

Dan: 03:07 I'm going to do bats and stats.

Mel: 03:09 You are weird.

Dan: 03:10 Yes.

Mel: 03:10 However, so what Thorndike was doing was putting a cat in a box, and there was a bunch of different things that the cat could essentially play with, or I guess interact with, but just sitting just outside the cat box was a fish. We all know cats want to eat fish.

Dan: 03:25 Like, in a fish bowl?

Mel: 03:26 It was just sitting there. It was like-

Dan: 03:26 It's like a dead fish.

Mel: 03:29 It was a fish that was available for the cat to eat.

Dan: 03:32 Yeah, okay.

Mel: 03:33 Right? Obviously the cat wants to get to the fish, so that provides the motivation to get out of the box. So the cat's interacting with all the things in the box, and it presses the lever. The lever releases a catch. The door opens, the cat gets out, gets the fish, reward.

Dan: 03:46 Boom.

Mel: 03:47 Okay. You put the cat back in the box, doesn't have to play around very much. It quickly figures 'alright I know what I want, I know how to get it. I'll press the lever. Out we go, I get my fish.' So basically Thorndike was showing that the cat can actually learn how to escape by giving it a reward afterwards.

Dan: 04:00 Mm-hmm (affirmative).

Mel: 04:01 Once Thorndike had finished playing with all the cats. And the fish. And feeding the fish to the cats. He extended his thinking to wonder how this would apply to people.

Dan: 04:10 He's like "so I finished with the middle of the animal kingdom, and I'm going to straight to the top now."

Mel: 04:14 Straight to the humans, right? And more straight to children. So principles of reward or punishment. So his work has influenced the way that we think about what is good and what is bad.

Dan: 04:23 Right. I mean, it's funny in the way you say it, it sounds like there's this binary kind of worldview that some things lead to good outcomes and some things like to bad outcomes, and that's the end.

Mel: 04:33 Well, pretty much that's how it is when we're little. Like in terms of how much our brain can take on, when we're little, it's helpful for us to think in binary terms, good or bad, right or wrong. That's about the extent to which we can conceptualise things.

Dan: 04:43 Yeah. So I guess if I think about kids' stories or fables or fairytales and things like that, there are always very good characters in those who, you know, are also usually very good looking or handsome or beautiful. Handsome Prince and the beautiful princess. Then there's also bad people.

Mel: 05:02 The bad characters.

Dan: 05:02 Ugly stepsisters or like deformed baddies or, you know, Gargamel.

Gargamel [clip]: 05:07 "I'll get you. I'll get all of you if it's the last thing I ever do!"

Mel: 05:15 Yeah, I remember Gargamel.

Dan: 05:16 You know, they never looked quite right. There's no handsome baddies.

Mel: 05:19 But all we have to think about is the ugly stepsisters and the contrast between the beautiful Cinderella and her ugly stepsisters..

Dan: 05:25 Or He-Man and Skeletor. It's not a fair beauty fight.

Mel: 05:30 So these dichotomies influenced the way that we're taught as children, right? So we're very ingrained to believe that there is good or bad, there is right or wrong, and also that good is associated with other good things.

Dan: 05:42 Yes.

Mel: 05:42 Other things that we perceive as good. Like beauty, like intelligence.

Dan: 05:46 Being funny and generous.

Mel: 05:47 All those sorts of things, right. Bad is associated with being ugly, with being evil, with being nasty.

Dan: 05:54 Stingy.

Mel: 05:54 Selfish. All of those things. So this is where some of Thorndike's more influential work in the field of cognitive biases comes in. Because-

Dan: 06:06 I feel a heuristic coming on.

Mel: 06:08 There is a heuristic coming on.

Dan: 06:09 I feel a Beyonce track coming on.

Mel: 06:10 You do?

Dan: 06:11 Yeah, what do we got?

Mel: 06:12 We got the Halo Effect.

Beyonce [clip]: 06:15 [music]

Mel: 06:26 So the Halo Effect describes the tendency for positive impressions that we have of a person or perhaps a brand to positively influence the opinion that we have about them in other areas. So like what we just said, that if we think that somebody is physically attractive, we're also more likely to think that they're intelligent, that they're funny, that they're just a genuinely, really good person.

Dan: 06:45 Yeah. Which I mean, feels like a weird thing to admit, but I think we all know we've had the experience. Maybe somebody turns up for a job interview or you meet somebody new in a corporate setting, and they're well dressed, and you just therefore assume that they've got a little bit of a headstart in how you think about how they might be able to perform their job. Even though dressing well might have nothing to do with being a great copywriter or a great artist or a great programmer, or even a great salesperson.

Mel: 07:07 Yeah. I mean the halo effect is fundamentally at the origin.... It's where stereotypes start.

Mel: 07:12 Right, we think of one positive thing and then that sort of brings to mind all these other positive things. Or the flip side is that we think of one negative thing and that lights up all these other negative attributes about a person.

Dan: 07:21 It's a dirty halo.

Mel: 07:23 Yeah, well it's actually known as the Horn Effect.

Dan: 07:25 The Horn Effect?

Mel: 07:26 The Horn Effect is the opposite of the Halo Effect.

Dan: 07:28 Right, not like a [horn sound] horn, like a devil.

Mel: 07:31 Like a devil's horn, yeah. That's where it comes from. So may I offer you some research?

Dan: 07:36 You know I love research. Let's do some research.

Mel: 07:43 So Thorndike's 1920 research in which he started talking about the Halo Effect was based on his observations that people were disproportionately rating other people on factors that they didn't know anything about based on limited information. Simply, what he did was he asked commanders in the army to rate their subordinates, so to rate their soldiers basically on different characteristics. He actually specifically asked them to rate them independently on four qualities.

Mel: 08:12 So he asked to rate them on their intelligence, their physique, their character, and their leadership. He specifically said to them, don't let your answers influence each other, you know? Like, I just want you to rate them on their intelligence, not on anything else.

Dan: 08:25 Yeah, so can you just give me those four again?

Mel: 08:26 Intelligence.

Dan: 08:27 Yes.

Mel: 08:27 Physique.

Dan: 08:28 Yes.

Mel: 08:28 Character.

Dan: 08:29 Yep.

Mel: 08:29 And leadership.

Dan: 08:30 Yeah.

Mel: 08:31 Now some of these should be related to each other. Like intelligence and leadership usually go hand in hand. And character and leadership usually go hand in hand. But what Thorndike found was that the correlations between the ratings made by these commanders were way higher than they should have been for things like intelligence and physique.

Dan: 08:49 So, sorry. So what you're saying is if they rated somebody as high, as having good physique, then they also were far more likely to rate them as highly intelligent or highly charismatic or good leaders?

Mel: 08:57 But also, like too intelligent.

Dan: 08:58 Yeah.

Mel: 08:59 Like even more intelligent than they're supposed to be. So their ratings on these four qualities were hugely correlated. Right? To a point that's just not realistic.

Dan: 09:08 When you say she hugely correlated, to the non-doctors amongst us, so I guess what you mean by that is-

Mel: 09:12 They were too strongly associated.

Dan: 09:13 Yeah. So basically somebody came out as high on all four or low on all four?

Mel: 09:17 Pretty much.

Dan: 09:17 When really that should be kind of mixed, right?

Mel: 09:20 So it reminds me of having rose colored glasses that when you see somebody as intelligent, you're also going to see them as attractive and this and this and this. Right? As opposed to what I refer to as crap colored glasses.

Dan: 09:29 Right.

Mel: 09:29 So this is the thought, the Horn Effect. I keep getting horn and Thorndike.

Dan: 09:34 Horndike.

Mel: 09:34 Anyway. Not his name.

Dan: 09:36 No.

Mel: 09:37 But the idea that, when you think something negative about somebody or when something looks crap, everything's just crap.

Dan: 09:44 All right. So Thorndike found out that behaviours that get rewarded get repeated more often than those that don't, and also found out that you really should judge a book... Well, we really do judge a book by its cover.

Mel: 09:54 Yeah.

Dan: 09:54 Pioneering work, Thorndike. So I mean, it's interesting because that intuitively makes sense, and then it's interesting to look at the research. Well, it's interesting for you to look at research and tell me what you found. So if you're rating people and you rate them as good looking, you are naturally going to also give them a headstart in, you think that they're charismatic and competent and...

Mel: 10:13 Yeah.

Dan: 10:13 So from I guess a brands or business perspective, for me, this comes to light in two different ways. One of the first things this makes me think about is 20 years ago when I was working at a Nike factory outlet. I was there at the time when Nike launched a new cushioning technology, which was called Nike Shocks.

Mel: 10:30 Wow, you're old. You're old.

Dan: 10:32 Yeah, very old. So they had these things called Nike Shocks, which they're still kind of around; a lot of them are coming out in retro models now. As opposed to air cushioning, shocks were these kind of, almost like springs. They were like these little mini columns which had some sort of magical gel or something in them.

Dan: 10:49 These things had, if I remember correctly, 16 years of R&D, which is basically half of Nike's life at the time, right? 16 years of R&D had gone into them. Hundreds and millions of dollars in research. When they were released, they came out at the time, an eye water-ingly high price point of $300 for a pair of shoes, which 20 years ago was just insane.

Mel: 11:09 Yeah.

Dan: 11:10 You know how these things sold?

Mel: 11:11 Tell me.

Dan: 11:12 Horrifically.

Mel: 11:13 Right.

Dan: 11:14 In fact, the year that they came out, when Christmas rolled around, every employee in Australia got a free pair of Nike Shocks because they just couldn't clear them. Right? 300 bucks, people just weren't willing to pay for it.

Mel: 11:25 Yeah.

Dan: 11:26 But at the same time as this was happening, the business was selling thousands and thousands of pairs of the $79 cross trainers at Rebel Sport.

Mel: 11:35 Okay.

Dan: 11:36 You know? It sort of really crystallised for me this idea, this was very early on, that what we sell, and what people buy are usually not the same thing.

Mel: 11:44 Right, it's like leakage. It's like a spillover effect.

Dan: 11:46 Exactly. Because if you didn't have the $300 shoes that nobody bought with 16 years and billions of dollars of R&D in it, nobody's interested in buying the $79 cross trainers just to try and get a piece of the same brand that did it.

Mel: 11:57 Yeah.

Dan: 11:58 So what we sell and what people buy are usually not the same thing.

Mel: 12:01 Yeah. So Nike Shocks are like the best marketing fail that ever happened for Nike.

Dan: 12:05 Well, I mean, yeah, I guess you could say that. Like they're one of those things that really cemented at the time people's view of them as a pioneering, innovative technology-first sporting company. Even though in reality if you looked at the direct sales of those shoes, they didn't do very well.

Mel: 12:21 Okay. This plays out in other areas. Like, there are other examples of this throughout.

Dan: 12:25 Yeah, absolutely. So this idea that because the company did one thing great, they do lots of other things great is everywhere. One of the most commonly cited examples is what happened with the iPod. So back in 2004 we got granted the fourth generation iPod, which basically is where iPod went mainstream.

Dan: 12:41 So the fourth generation iPod was the first one with the color screen, and you can have like little pictures on there as well. A lot of people, that was the first iPod that they had. So we were all still using our PC computers mainly. But I've posted-

Mel: 12:54 I don't know about you, I was using CDs for music. No iPods.

Dan: 12:56 Yeah, yeah. Or shitty MP3 players. But the 2004 fourth generation iPod was really the one that kind of went berserk.

Mel: 13:04 Okay.

Dan: 13:04 So a funny thing happened the following year, sales of Apple's computers when up 68%.

Mel: 13:10 Right.

Dan: 13:10 Where they weren't really new computers, but people had seen the iPod and said "holy crap, whatever company made this must be unbelievable."

Mel: 13:17 They're doing some really cool stuff, yeah.

Dan: 13:19 I'm going to go and halo, like take the halo, the shine of the iPod and go and apply it to other things in this company's range.

Mel: 13:24 Yeah.

Dan: 13:25 Same happens with music as well when an artist brings out a new song or a new album, and it does really well, not surprisingly, the back catalog sales usually tend to go up as well.

Mel: 13:34 Right.

Dan: 13:35 Because the Halo Effect says, well the new song's good, so the old stuff must be pretty good as well.

Mel: 13:39 Right, so the Halo Effect is super powerful in marketing.

Dan: 13:42 Yeah, absolutely. So that's one way that it plays out for brands that we have to be mindful that what we sell and what people buy aren't necessarily the same thing.

Mel: 13:49 Yeah.

Dan: 13:49 The other place where I think it plays out is particularly around first impressions because this whole heuristic really is about first impressions count.

Mel: 13:57 For sure, yep.

Dan: 13:58 So when I think about the disproportionate impact first impressions can have. So if you have heard about a brand, you go onto their website, you try to use the search feature on their website, and there's actually some really interesting research, which I won't quote like you would. But trust me, there's research on this that if people try and use a search function on a website, and the search function is crap, you straight away deduce that the whole website is crap.

Mel: 14:22 Yep.

Dan: 14:23 Then by extension that this company is crap.

Mel: 14:24 Yeah.

Dan: 14:25 Right? If you try and call a business to speak to one of their customer service representatives, and they leave you on hold for a long time-

Mel: 14:32 Been there.

Dan: 14:32 Your association is going to be, this business is slow and can't get shit done-

Mel: 14:36 Ineffective.

Dan: 14:36 -is running inefficiently and is running ineffectively and that's my whole view on it. I was thinking about customer on-boarding processes, so if you're letting customers onboard themselves through a website, what the simplicity or difficulty of that says about the company as a whole.

Mel: 14:51 Yeah.

Dan: 14:52 The company that is hard to sign up with is probably going to be a hard company to deal with, and it's probably going to be not that good at actually delivering their core service even though the two probably don't have that much to do with each other.

Mel: 15:02 Yep, and we've talked before about, you know, in the context of how important first impressions are. We've talked before about how we're really simple in the way that we'll take a first impression, and we will generalise that to other aspects.

Dan: 15:13 Yeah.

Mel: 15:14 Of somebody's personality, of other things that they're good or bad. Look, we mentioned at the start about how important that is to us about how ingrained that is; that's the way that we learn things fundamentally.

Dan: 15:22 Because grey is hard. Grey is really hard. Black is easy, white's easy. Grey's like, I don't have time for time for grey.

Mel: 15:27 This is where these shortcuts come from.

Dan: 15:28 Yeah.

Mel: 15:29 From like, basically shortcuts we use because life is hard.

Dan: 15:33 Exactly. So it's not going away, right? Halo Effect is for real.

Mel: 15:36 We're all vulnerable to it.

Dan: 15:38 All vulnerable-

Mel: 15:38 Even if we know that we're vulnerable to it, we're still vulnerable to it.

Dan: 15:41 Exactly. So really what this tells us is that old saying that first impressions count is absolutely true. So we have to be mindful on what other first impressions that we're going to make and knowing that they can have a far bigger impact than we might realise.

Mel: 15:54 Yeah, and then so going back to like the human, you know, just the general day-to-day person experience and what we do, if we're aware of the Halo Effect, it's about the way that we judge people, right? If we're talking about the way that we make impressions of people or the way that we treat other people, it's fundamentally about questioning ourselves and challenging our view of that person, and go, hang on, do I have evidence to actually back up that this is true about a person? Or is this the Halo Effect?

Dan: 16:19 Yeah, and really, where I thought you were going with this is knowing that people are going to judge you on your first impression. Like, just brush your hair. Wear something nice.

Mel: 16:26 Keep it simple.

Dan: 16:27 Have a firm handshake.

Mel: 16:29 Smile.

Dan: 16:29 Look people in the eye. Yeah. It matters. Maybe if you do have negative things about yourself, maybe just hold off until the second meeting when you tell people about them.

Mel: 16:36 Yeah, yeah. Give only positive things on a first date.

Dan: 16:39 Yeah.

Mel: 16:40 No need to tell people too much about yourself too early.

Dan: 16:43 I think that is sound advice.

Mel: 16:46 That's dating advice. Plus marketing advice plus parenting advice. This episode really has it all.

Dan: 16:51 So from a brand perspective, what I think we should do about this, what I encourage my clients, what I encourage other businesses to do is look for your Nike Shocks equivalent, right? Look for your thing that people are going to see from a distance and say, holy crap, even if I don't buy that thing, I want to buy something from the company that made that.

Dan: 17:07 I think there's a saying in the car industry win on Sunday, sell on Monday. You know, so for car manufacturers to make super high powered race cars or crazy concept cars that they're never actually going to move units of, does help move the everyday station wagons and SUVs that mum and dad's going to buy because they want a little piece of that halo magic. I would also say within that, if you're going to think about making something great, really focusing on doing something that is going to make you famous and epitomize what your organisation is all about, you get bonus points if you put it as the first interaction that people are going to have with your brand. Knowing that the earlier on that interaction and that impression is formed, the more important it's going to be for people's long term perceptions of your business or brand.

Mel: 17:47 Sounds good.

Dan: 17:48 So if you're a person, brush your hair. If you're a brand, brush your hair.

Mel: 17:52 Same thing applies.

Dan: 17:53 Yes. All right, is that a wrap on the Halo Effect?

Mel: 17:55 I think that's all we got.

Dan: 17:57 All right, we got to that textbook definition one more time?

Mel: 17:59 Halo Effect is the tendency for positive impressions that we have about a person or a single positive impression to unduly influence other aspects or other things that we think about that person.

Dan: 18:08 Yeah, so if you're a brand, give people a positive thing to have an unduly large impression about.

Mel: 18:12 Sounds good.

Dan: 18:13 If you're a person, do the same thing.

Mel: 18:14 Do the same thing.

Dan: 18:15 Cool. All right. Well, hope you've enjoyed that.

Mel: 18:19 I learned a lot.

Dan: 18:19 I learned a lot.

Mel: 18:20 So everybody must have learnt a lot.

Dan: 18:22 People must also think we're pretty good looking.

Mel: 18:24 Yeah, they'd be right.

Dan: 18:25 And generous.

Mel: 18:26 Yeah.

Dan: 18:27 And funny.

Mel: 18:27 We're hilarious.

Dan: 18:28 Hello.

Mel: 18:29 Don't forget intelligent.

Dan: 18:30 I think we should wind this down.

Mel: 18:31 All right. Thanks for listening, guys. Catch you next time.

Dan: 18:33 Bye.

#24 Mere Exposure Effect: Why turning up is half the battle

What is it that makes retro fashion take off, and is the Eurovision completely rigged? In this episode, Mel and Dan explore what happens when we see, hear or experience the same thing over and over again.

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Mel: 00:19 Hi and welcome to Bad Decisions.

Dan: 00:21 The podcast that helps us understand why we choose what we choose.

Mel: 00:23 Why we think what we think.

Dan: 00:25 And how to exploit this stuff for fun and commercial gain.

Mel: 00:27 I'm Doctor Mel Weinberg. I'm a performance psychologist.

Dan: 00:29 And I'm Dan Monheit, co-founder of Hardhat.

Mel: 00:41 So obviously this is a podcast about different heuristics, right?

Dan: 00:44 Yeah. That's what we're here for.

Mel: 00:46 Technically that's what we do. And we've been talking about all sorts of different heuristics and ways that we come about making decisions. And some of them have gotten quite complex. We've talked about all sorts of different things, but most of them have to do with things like social conformity, classical conditioning - how to make things more inherently attractive, right? And I feel like in all of this complexity and us trying to sound really smart about this stuff, we've sort of overlooked something really quite simple.

Dan: 01:17 Okay. So, what? We're going to wind it back? We're going back to basics?

Mel: 01:18 We're going back to basics and we're going back to the idea of simple exposure, mere exposure, if you will.

Dan: 01:26 If I will. I will.

Mel: 01:29 The Mere Exposure Effect was not even called a heuristic originally. It's an effect that describes our tendency to prefer things simply because we've been exposed to it repeatedly.

Dan: 01:41 Just hang on one sec. Did we just drop what the topic for today's thing is without any fanfare whatsoever?

Mel: 01:46 We did.

Dan: 01:46 Can we cue some fanfare for the Mere Exposure Effect, please?

Dan: 01:54 Adequately fan-fared.

Mel: 01:56 The Mere Exposure Effect was introduced to us in around the 1960s by a Polish social psychologist, Robert Zajonc.

Dan: 02:06 Can I just say before we get too deep into the Mere Exposure Effect, as a title of a heuristic, I like that it doesn't-

Mel: 02:14 Doesn't oversell itself.

Dan: 02:14 Yeah, it doesn't promise too much. It's just literally going to do what it says on the tin.

Mel: 02:19 Yeah, it's like "We know we're not a crazy amazing heuristic. It's just Mere Exposure Effect." Very subtle, unassuming, mere.

Dan: 02:26 Yeah. The mere, good looking enough husband.

Mel: 02:30 That's all. That's all we're talking about.

Dan: 02:32 Yeah, it's a humble heuristic. I like it.

Mel: 02:34 So, Zajonc back in the 1960s, way before a lot of the more contemporary behavioural economics stuff was happening. The research that he was basing his whole effect on, I guess we'd say a little bit basic, maybe, in terms of some of the research that we do now.

Dan: 02:53 The guy's a pioneer.

Mel: 02:54 And remember, it's the '60s, and so there's a lot of research on animals. Before we had real ethics.

Dan: 03:00 The '60s ... what a bunch of savages.

Mel: 03:01 This is Poland in the '60s. So, one of the early studies that is cited with regard to the Mere Exposure Effect has to do with experimenters playing tones to unhatched chicks.

Dan: 03:14 Okay. So, I was bracing for something pretty bad from an animal cruelty perspective. Playing music to eggs ..okay? That's alright.

Mel: 03:21 Yeah, playing music to unhatched chicks. And they were playing ... Music might be a bit generous. They were playing tones of different frequencies.

Dan: 03:31 Poland's greatest hits of the 1960s.

Mel: 03:31 One of the tones would be repeated more frequently than the other. And then, when the chicks were hatched, they were assessing which tone the chicks preferred. And granted, I have no idea how they were doing this.

Dan: 03:42 Yeah, what are chicks buying in iTunes?

Mel: 03:44 I'm assuming that they're doing some sort of little chicken dance to one of the tones, and the other one they're just going, "No, I don't like this." But however they assessed it, they established that chicks had a preference for the tone that they'd heard more frequently when they were unhatched.

Dan: 04:01 So, DJ Zajonc in the Chicken Club knows how to get the dance floor pumping! He knows which tracks are the bangers and which ones are just going to clear the floor.

Mel: 04:13 That's what was happening, right?

Dan: 04:14 I wish I could have been there to see this happening.

Mel: 04:18 Another study that Zajonc cites in 1968, I'll actually read to you the story because it's better when it's read. It says, "A mysterious student has been attending a class at Oregon State University for the past two months enveloped in a big black bag."

Dan: 04:37 I'm imagining, "They had an exchange student?" It's like-

Mel: 04:40 There's a new kid in class, but he's enveloped in a big black bag.

Dan: 04:44 He's wearing a giant black bag.

Mel: 04:46 Yeah, "Only his bare feet show. Each Monday, Wednesday, and Friday at 11:00 AM, the black bag sits on a small table near the back of the classroom."

Dan: 04:54 What?!

Mel: 04:55 "The professor of the class only knows the identity of the person inside. None of the 20 students in the class do."

Dan: 05:01 How does he get into the classroom? Does it have a little mailbox eyehole cut out?

Mel: 05:05 He must, can you imagine?

Dan: 05:08 It's like, "I really wanted to put him in a mascot costume, but I had $1.30, and so all I could do was buy a garbage bag."

Mel: 05:14 Find a big black bag. Research funds were not going very far.

Mel: 05:19 Here's what happened. So, he's coming into the class-

Dan: 05:21 Stumbling over tables.

Mel: 05:23 -and at the start-he's not talking, he's not engaging, he's just literally sitting there. And obviously at the start, everyone's looking at him going, "Dude, this is a bit weird. What's going on here?" Right? But the professor's acting as if he's completely normal.

Dan: 05:33 I just would love to have been in the brainstorm when they were coming up with ideas for this experiment. It's like, "What about we take a student and we put them in a black bag and just sit them up the back of the room and see what happens?" And what happened?

Mel: 05:46 At the start, obviously people think this guy's a bit weird. They were approaching him with a bit of defensiveness and hostility, as you would because everybody's dressed normally and this guy's come in enveloped in a big black bag. But after a couple of classes, as he keeps attending, people's attitudes towards him change. And his classmates started to actually have an affinity for him. And actually, they even liked him.

Dan: 06:08 What?!

Mel: 06:08 And they acted a lot more friendly towards him.

Dan: 06:09 This is bazar. This was also in Poland in the '60s?

Mel: 06:11 To be fair, Zajonc was onto something. He just maybe didn't have, I guess the integrity of the research to really back it up.

Dan: 06:21 But just like a manikin maybe, or like a pet? There's a lot of options, really, rather than putting a guy in a black bag for three days a week. Can we do a followup story and try and find that kid?

Mel: 06:33 Should we just repeat the experiment?

Dan: 06:36 I want to find the guy and just see how his life has panned out for him. "So, people liked me better when I was covered in a black bag."

Mel: 06:42 Maybe a side project for you and I to explore. But black bag guy, if you're out there, reveal yourself. We'd love to hear from you.

Mel: 06:50 We can think about why this happens, I mean, it's basic, right? This is the Mere Exposure Effect.

Dan: 06:58 Totally, totally basic. This is why I wear a black bag Mondays, Wednesdays and Fridays. It's bloody obvious.

Mel: 07:04 Any time you're exposed to something for the first time, you're wired to see it as a threat. It could be dangerous to you. For all your brain knows, and remember, we've talked before about how your brain is fundamentally driven to keep us alive. Anything that is new or that you have not encountered before is going to be seen as threatening. So, you respond to black bag guy with hostility, right?

Mel: 07:27 With each repeated exposure, you learn, "Hang on. This thing, this black bag guy, or whatever new stimulus it is, and I can actually coexist in this world. So, this thing is in fact no threat to my survival whatsoever. In which case, this is safe to engage." And you start to sort of become more curious about it and become more interested in it and effectively like it more.

Dan: 07:48 Yeah, and next thing you know, you and Snoop Baggy Bag are just hanging out.

Mel: 07:53 Dancing at the chicken club.

Dan: 07:55 Getting milkshakes. Wow.

Mel: 07:57 It's all happening. So, it took until 1992 for people to develop a more real life, I guess, version of the black bag experiment. And they thought, "How can we try this a different way?" And they went back into college classes where all good psychology studies happen.

Mel: 08:15 And what they did was they chose four women who were not at all involved in the college, but were sort of college age, maybe from a different college. They wanted them to be completely unknown to the actual people attending the class. They had four different women who were rated equally by others on their attractiveness, all those sorts of things. And they popped them into the classroom, but at different times or for different amounts of time.

Mel: 08:39 So, for example, one of these women might have attended the class five times, one of them attended 10 times, one of them attended 15 times, and one of them attended not at all.

Dan: 08:48 In bags? Or just in their normal wear?

Mel: 08:49 No, just regular outfits.

Mel: 08:51 But they'd sit up the back of the class and they weren't participating in the class. They weren't really talking to anybody, just sitting by themselves. At the end of the sort of experimental time, what they did was they presented photographs of these four people to all of the people in the class, and they asked them to rate them all on their likeability.

Dan: 09:07 Rate for hotness.

Mel: 09:07 And what they found was that the person who had been exposed to them the most, so the one who'd attended 15 times was rated as much more likeable than the ones that they'd seen less frequently.

Dan: 09:17 I mean, this is great. Look, if you are not the most attractive person in the world, and I'm going to put my hand up and say, look, I'm probably not top 10 in the world, this is very encouraging. Like, if I just keep turning up, people are just going to find me more and more attractive.

Mel: 09:31 They're just going to like you. You don't even have to talk.

Dan: 09:33 Maybe I shouldn't talk at all.

Mel: 09:34 I think that's the cool thing for me about this effect is that a lot of the other effects have to do with people interacting or engaging with the stimulus. And this is mere exposure. Like, you don't need to have spoken to this thing, you don't need to have interacted in any sort of way. It's just for some reason that when this thing or when this person enters your perceptual awareness, and if it does so repeatedly, you're going to like it.

Dan: 09:57 So really at a fundamental level here, what we're saying is the more often you are exposed to a thing, the more familiar it becomes, the more open and likeable you might feel towards it.

Mel: 10:08 Yeah.

Dan: 10:08 Which is wonderful for advertising! Because basically, that's what we're trying to do, right?

Mel: 10:12 Yep.

Dan: 10:13 But before we get into the guts of advertising, some of the other things that come to mind for this are the ability for cover songs, you know? So, a song that was done 30 years earlier to come back, and it's instantly racing up the charts because everybody's preconditioned to like it.

Dan: 10:28 I think about retro fashion at the moment in the sneaker world. Like, these Filas that were massive in the '90s have just blown up and they're everywhere. And it's like, people were ... I guess people have been pre-exposed. Like, if you need, let's say 1,000 exposures to like something, if people already had 980 exposures back while they were growing up .. then all you've got to do is just top them up with the extra 20. And so, all of a sudden, I start seeing why cover songs and retro fashion and styles and retro brands can come back so quickly and with such ferocity because we're kind of like ... the mere exposure is pre-baked.

Mel: 11:06 Yeah, it's already in there. I'm actually glad you took us to the music industry because I do have another research study that I stumbled across when I was looking up the Mere Exposure Effect

Dan: 11:13 More research. Yes.

Mel: 11:19 It's just from last year. It's a 2018 study about mere exposure effects in the real world. And what Georgios Abakoumkin, and I'm sure I haven't pronounced that properly, but what he did was he looked at Euro Vision. We have some Euro Vision fans out there. I'm sure we've got some great Euro Vision music.

Dan: 11:52 I'm sure we have Euro Vision music. I wish you could see the Euro Vision costumes.

Mel: 11:55 So, with Euro Vision, I'm not a big Euro Vision fan, I must admit.

Dan: 12:00 Yes, you are. Maybe you just need to watch it more.

Mel: 12:03 Maybe.

Dan: 12:03 That's what I'm learning today.

Mel: 12:04 Maybe that's what would happen. But the voting system and the way that you sort of get through, my understanding at least, is that countries or performances will compete, and so there will be exposure to the audience. And the top 10, say, who were voted in will make it through to the finals. But in the finals, they are met by the top 10 from the previous year. And so, when you get to the finals, you've got a naturally existing Mere Exposure Effect, where you've got half of the contestants who have been heard before and half of them who you're hearing for the first time.

Dan: 12:38 Yeah, I can see where this is going to end.

Mel: 12:39 Yeah, we can look at the voting patterns. And what actually happens is that when you account for other factors, like the actual quality of the song, which can be questionable when it comes to Euro Vision, the songs that were performed, or that were exposed more, like performed twice to the audience, placed higher than those that were only performed once. So, this was between the years of 2008 and 2015.

Mel: 13:06 And this just gets me thinking, "Why don't I get to watch this sort of stuff and count things and do this sort of research?"

Dan: 13:11 Yeah, you've wasted your career, basically, not watching Euro Vision.

Dan: 13:14 I think this Mere Exposure Effect is as basic as it is profound. It's like so obvious that the more often you see something or the more often you're exposed to it, the more open you are to it. Like, I notice this even in my own news feed where I'll see an article once and I won't click on it. And I'll see it twice, I won't click on it. By the third time I see it, it's like, "Maybe I actually am kind of curious about this." I feel it has worn me down. It's so fundamental, so basic, but also so profound. Like, maybe we've just over-engineered everything. And really, all we need to do is just-

Mel: 13:44 Merely expose.

Dan: 13:45 ... merely expose. Yeah.

Mel: 13:45 Maybe that's as basic as it gets.

Dan: 13:47 I mean, one other thought on this whole retro thing, and I've sort of watched on with interest at the Pokemon Go craze from a couple of years ago. I think a lot of people really misinterpreted what happened there. So, there's this augmented reality app that came out where you got to use your phone to try and hunt for Pokemon characters around the cities that you lived in. And I think a lot of people looked at that and decided that the success here was it was a really good application of the technology, that augmented reality and gamification and all these other buzzwords are what had come to play there.

Dan: 14:16 And it would seem to me that the bit that people really missed out on understanding the success of Pokemon Go, was the pre-exposure or the pre mere exposure of all these people in their 30s now had watched this show in their 10s and teens, so were pre-exposed to like this. And so, it wasn't just putting together a cool new phone application. It was like putting a cool new phone application together for a thing that millions of people had already been exposed to and built favourability for 20 years earlier.

Mel: 14:49 So, you're capitalising on the pre-exposure.

Dan: 14:50 On pre-baked exposure.

Mel: 14:53 Yeah, so you've got to plant the seed early for this stuff, right?

Dan: 14:54 Yeah. And I wonder if in a lot of ways, the window for this has closed, right? Because we've got the last generation that grew up, at least in Australia, with three commercial TV channels and two newspapers, right? And where we had people at scale exposed to the same jingles, the same TV shows, the same cartoons. And I think about the way kids consume media today, and there's this infinitely fragmented landscape where people just watch what they want when they want from all over the world. And that idea of having a mass strata of the population all pre-exposed to the same thing at the same time, I think is finished. So, I think retro ... trying to retro stuff in 20 years is going to be hard because you're not going to have that baseline that we have to play with today.

Mel: 15:38 Yeah, unless you create it now.

Dan: 15:40 Yeah, but what I'm saying is it's hard to create now because that mass exposure of a whole population to the same TV show or the same jingle or the same message just isn't possible like it used to be.

Mel: 15:51 Fair enough. Give us some tips for advertising because I've got plenty more to talk about in regards to the Mere Exposure Effect, but give us some practical stuff.

Dan: 15:58 Okay, cool. So, the really obviously thing with this, is that we just need to get our brand in front of people. So, when you're an advertiser, you are paying for every exposure, whether people understand that it is from your brand or not from your brand. I think the biggest takeaway from this is that there is no point in making stuff that is not easily associated with your brand. Because mere exposure to your brand will build likeability. And so, core to that is understanding what we call either distinctive assets or brand code or some small collection of unique attributes that are very easily identifiable as your brand. So, that might be shapes, it might be words, it might be font, it might be tones, logos and typefaces, all of that sort of stuff, so that people immediately know, "That was a piece of communication from that brand."

Mel: 16:49 It's actually interesting how we've talked about things that you can see or people or tones that play to chicks. But one of Zajonc's early studies actually looked at Chinese characters. So, for people that had no exposure to Chinese symbols or characters, etc., and they would show the different characters. And they found the same thing that people actually had a preference for the characters that they'd seen more times. Even though it meant nothing to them, they didn't understand it. And so, it's just a visual image of something. It's just a character.

Dan: 17:20 Yeah, and so there is no question in my mind that we would pick brands and we would pick stocks and we would pick all sorts of other things in life for no objective reason other than they're more familiar. And so, if I think about some applications of this in the real world, if you think about some of the most iconic brands that we have, whether that's in the automotive world or in fashion or in fast food or in food and beverage, their logos and their key visual distinctive assets stay the same, you know? The Coke logo looks the same. The Nike swoosh looks the same, and you just get exposed to it over and over and over again. And there's no question when you see a Nike logo whether that is a logo for Nike or from somebody else.

Dan: 17:59 Sometimes one of the places where this goes wrong is as marketers, we get bored. And we like to create new brands and sub-brands and we like to update our look and feel to stay more contemporary. And I think we forget that we get bored and move on much quicker than our consumers do. And actually, what the great brands of the world show us is that if we just hold the line, and just keep using our distinctive assets early over and over again, it's going to be far more successful than chopping and changing.

Dan: 18:25 A great example of this at the moment is Coca Cola, who's brand architecture really spiraled out of control where they had sub-brands and different products that looked completely different. In the last 12 months, they've brought everything back together under this one Coke. So, every can is red, every bottle basically looks the same. And there's maybe a 15% variation. There's a colour stripe at the top, so the normal Coke is red and Coke Zero has got a little black strip and Diet Coke has a little silver strip at the top. But 85% of the can or the bottle is exactly the same for every product, because you're just getting exposed over and over and over again to the same visual assets.

Mel: 19:04 One of the cool things about mere exposure for me is ... and something that makes it different to a lot of the other heuristics that we've talked about, is how we don't even have to be aware that it's happening to us. Like, I mentioned before how we don't even have to interact with it, or we don't have to ...

Dan: 19:20 You can be an egg.

Mel: 19:24 You could be an egg and it still works. But there's some research that shows that the Mere Exposure Effect occurs subliminally as well, which of course is super important for advertising. To speak to that a little bit, there was a study by Bornstein, Leone, and Galley in 1987. And basically, they had people doing a task that was completely unrelated, just something that was sufficient enough to capture their attention. And say they're doing it on this old style computer screen. That would be sort of, I guess, a modern take on it.

Mel: 19:50 So, imagine you're doing something on a computer screen and you're not aware of what's going on because you think you're just doing this task. But actually, what's happening is that you're getting flashed photos of faces that sit on the screen for about four milliseconds. So, not even enough for it to sort of register cognitively. And some of these ... There's different faces getting shown, but some of them are getting shown more than others, right?

Mel: 20:13 At the end of you doing this task, when they ask, "Did anything weird happen? Like, did you notice anything?" And you're like, "No. I wasn't actually doing anything .. "

Dan: 20:22 "There's just a guy in a black bag sitting up the back of the room, but other than that, everything's normal."

Mel: 20:27 No, but this is the bag! It's subliminal, right? So, you actually aren't even aware that anything is happening to you, that you're being exposed to anything. And still, when you're asked afterwards which of those ... you know, to rate the attractiveness of these faces, you're going to rate the ones that were flashed more times as more likeable. How crazy is that? You're not even aware of this in the slightest. You have no idea this is even happening to you. This is scary when it comes to advertising. Well, for consumers.

Dan: 20:49 Yeah. So, for me, I mean, straight away two things jump out about this. One is that there's a lot of bemoaning in the industry about how a lot of the digital platforms like Facebook and YouTube will count an ad view as three seconds or five seconds or two seconds. And it's outrageous-

Mel: 21:06 People haven't actually viewed it, right?

Dan: 21:06 Yeah. But what we're going to see is in two seconds, you only need four milliseconds for somebody to subconsciously notice what the brand is or what the image is. The rest of it, you can just stretch out.

Dan: 21:18 I'm not saying this is the cure for advertising. I mean, obviously we want to build emotional connections with people and we want to be able to tell great stories. But just the exposure, the mere exposure is important. And that is a thing that you can do if you get your key distinctive assets in within the first one second of the ad.

Dan: 21:35 The other thing that this brings to mind is what a dangerous slippery slope stalking is. If you kind of like someone and then you look at this heuristic- it's like, "if I look at them more from across the street in a tree with binoculars ..."

Mel: 21:50 I'm going to like them more. But the other side is if you just walk past them, you don't even have to interact with them, you don't have to say anything, just creepily happen to walk past them more than a couple of times, you will become more familiar to them. And then, they actually like you. This is not how we promote going about meeting new people ...

Dan: 22:08 But, there is hope for stalkers.

Mel: 22:10 We don't endorse stalking.

Dan: 22:11 The problem with stalking-

Mel: 22:11 But we can understand.

Dan: 22:13 The problem with stalking is that it's one way. What you need is a mutual stalking appreciation and everyone's just going to fall deeply in love with one another.

Mel: 22:19 You know, thinking like that ... Well, not thinking like that. But in sort of the same vein, you can see how online dating apps have sort of taken on the Mere Exposure Effect to a degree. And whether they've done it on purpose or not, I'm not sure. I'm sure they have because there's smart people behind them. But you know those apps where you're shown literally just a face of somebody who you've never seen before, usually? And you're given the option to like it or reject it, one or the other.

Mel: 22:45 I think at the start what was happening with this was that you'd just go through the pool, right? And you'd just go through the pool of options, like, dislike, whatever. But the apps became a bit more clever, and they started actually repeating some of the ones that you'd already rejected, right? This is mere exposure. You have no idea about this person, you have no interaction with this person, but you're seeing them more. And they're banking on the fact that because of the Mere Exposure Effect, at some point you're going to go, "Yeah now I like them."

Dan: 23:10 Yeah, or you're going, "Wow, this pool is a lot shallower than I anticipated. I can't believe I'm seeing this guy again. I just swiped no four people ago. Maybe I should give him a shot."

Mel: 23:18 Either way, there are clearly a lot of applications of this in the real world.

Dan: 23:21 So, for brands, really, it is as simple and as complex as getting your brand code, your key distinctive assets in front of people as often as possible. And this idea from a few years ago that maybe we should just make great content and not actually tell people that it's from our brand. If your objective is just to entertain the people of the world, go for it. But if your objective is to sell some stuff, make sure people know what brand it's from, and make sure they know early. What about as just normal people going about life? How can ... Other than a mutual stalking appreciation, where can this take us?

Mel: 23:53 I think this is about how we go about choosing new things or trying new things, right? Because we've got to remember that because of the Mere Exposure Effect or because of the way that we're just fundamentally wired, the first time we're exposed to something, we're probably not going to like it. So, when it comes to trying a new food, for example, first time you taste it, you're probably going to be a bit hesitant. Try it more than once.

Dan: 24:11 I think this is the thing with kids when you start introducing food. You're meant to make them try it like three or four or five times because they're just not going to like it the first time.

Mel: 24:19 Yeah. And we're not supposed to. It could be dangerous, it could be disgusting to us. So, what we actually need to do is commit to trying something new more than once. I'm not sure how many times is the right number, but it has to be more than once because the first time, chances are we're not going to like it.

Dan: 24:36 Right. So, if you decide, "I would like to be a more sophisticated version of myself. I'm going to go to the ballet." Once is not adequate. I must commit to going-

Mel: 24:45 Get a season ticket.

Dan: 24:46 Season ticket, go at least three times, and then make a call on if you like it or don't like it.

Mel: 24:50 Sure.

Dan: 24:51 What have we learnt here?

Mel: 24:53 I think at the end of the day, what we come back to is that if you were to walk in somewhere, your best chances of being liked are to envelope yourself in a big black bag because the world would be a much better place.

Dan: 25:05 Not immediately, but you need to envelope yourself in a big black plastic bag and turn up for a whole semester, and eventually people will love you.

Mel: 25:13 Yeah, just stick it out.

Dan: 25:14 All right, life advice from Doctor Mel.

Mel: 25:16 Sounds good, right?

Dan: 25:17 All right. Awesome. So, Mere Exposure Effect, just seeing it more, you're going to like it.

Mel: 25:21 Just the tendency for us to like something just purely because ... merely because we've been exposed to it.

Dan: 25:25 Yeah, brands, get your stuff out there early and consistently. People, go to the ballet at least three times before you decide you don't like it.

Mel: 25:31 Sounds like a prescription.

Dan: 25:31 Is that all right? Yeah. Awesome. All right. Catch you next time.

Mel: 25:53 See you.

#23 Status Quo Bias: Why old, stubborn people kind of have a point

Everybody loves change, right? Hell no! And it’s not entirely our fault. In this episode, Mel and Dan explore why we'll often go to huge lengths just to make sure everything stays exactly the same.

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Mel: 00:00 I can think of two fundamental reasons why we would want to maintain the current state of affairs.

Dan: 00:05 Sorry, I'm slightly confused. Are you telling me what you're about to do or is this actually recording for the show?

Mel: 00:08 Hi and welcome to Bad Decisions.

Dan: 00:29 The podcast that helps us understand why we choose what we choose.

Mel: 00:32 Why we think what we think.

Dan: 00:33 And how to exploit this stuff for fun and commercial gain.

Mel: 00:35 I'm Dr. Mel Weinberg. I'm a Performance Psychologist.

Dan: 00:38 And I'm Dan Monheit, Co-Founder of Hardhat.

Mel: 00:39 Let's do it.

Mel: 00:50 Hey, Dan?

Dan: 00:51 Yes, Mel?

Mel: 00:53 Want to do an experiment?

Dan: 00:55 Yes. Yes, I do.

Mel: 00:57 Once again, you are becoming a somewhat unwilling participant in one of my studies.

Dan: 01:03 Life as a guinea pig.

Mel: 01:03 It's not really my study though, let's be honest. I'm putting you in somebody else's study. We're just replaying somebody else's study.

Dan: 01:10 All right. This is going to get weird. Let's just do this.

Mel: 01:12 Okay. So I've got something for you, Dan. It's a virtual reality headset that you can wear and when you're in this virtual reality world, you're going to have a fantastic time. Everything that happens is going to be really fun, extraordinarily pleasant, exciting, it's going to just be full of positive emotions. You're really going to love it.

Dan: 01:37 Okay. This sounds like a good experiment so far.

Mel: 01:38 Okay, the thing is that once we put the headset on, you can't take it off.

Dan: 01:43 Ever?

Mel: 01:44 Ever. So I guess what I want to know is, do you want to subject yourself to a life of virtual reality that is absolutely wonderful and only going to be happy, not particularly real, happy nonetheless, but you're not going to know that it's not real, it's going to feel really real to you. Or do you want to stay with your current life, which may or may not be as happy as what you might get in virtual reality world of happiness?

Dan: 02:09 Well, for the record, my current life is just fine, thank you very much.

Mel: 02:12 That's good to know.

Dan: 02:12 But it's not ... Real life is not wall to wall happiness. We already have a parental advisory, right? This sounds weird as fuck. I want no part in this.

Mel: 02:25 Why not?

Dan: 02:27 In this thing forever?

Mel: 02:28 Yeah. It's going to be fun.

Dan: 02:30 It's a terrible idea. Life is surely about more than virtual ... Virtual reality experiences are kind of cool and fun for a little bit, but a full life and a fulfilling life is surely about real reality-

Mel: 02:44 Real reality? Yeah, this is some of your best work here.

Dan: 02:48 More so than reality of the virtual kind.

Mel: 02:49 Okay. So you don't want to play?

Dan: 02:50 Don't want to play.

Mel: 02:51 Okay, fine. I have another question for you.

Dan: 02:53 Okay. I thought there might be because otherwise this is a very lame experiment.

Mel: 02:57 So you're just chilling in your mansion on a Saturday afternoon with your supermodel wife.

Dan: 03:04 Yep. Got it.

Mel: 03:04 Just everything is just going wonderful. You've got a whole ... You're pretty much drowning in chocolate, but it's amazing. This is my idea of virtual reality heaven.

Dan: 03:12 This is bad for the carpet in my million dollar mansion, but let's go with it.

Mel: 03:16 Whatever. You're having a great time and then somebody knocks on the door and you're like, "Ah." Well, you've already said fuck, so you go, "Ah, fuck. I don't want to get up."

Dan: 03:23 Oh, the doctor says fuck as well? Jeez.

Mel: 03:26 Yeah, but what I'm saying as if I'm you and I go, "Fuck, I don't want to get up and go to the door. I'm just having such a good time."

Dan: 03:31 Yep, with my supermodel wife, and my chocolate bath in my living room.

Mel: 03:35 But you go answer the door and there's this curious looking, formally dressed ... we'll make it a man ... standing there. The man looks very official and he says to you, "Look Dan, I've got something to tell you. I'm from a virtual reality company and you've been living in a virtual reality world your entire life."

Dan: 03:54 Right. Feels very Men in Black. Is the man at my door Will Smith?

Mel: 03:59 It could be if it makes it seem better for you.

Will Smith: 04:00 "You know what the difference is between you and me? I make this look good."

Mel: 04:12 "And look, I'm really sorry. You've been part of this world, but actually you weren't supposed to be. We've made a huge mistake. Look, I want to give you a choice. Do you want to stay in this wonderful virtual reality world that is all that you've ever known or would you like us to take this headset off for you and go back to your real life? I should let you know that your real life is nothing quite like this. What would you like to do?"

Dan: 04:36 Well, this is an annoying question, isn't it? I mean, it's different. Maybe I would be more inclined to stay in my mansion and chocolate bath and with my supermodel wife - all of which things I obviously have in my real life as well ... but this, yeah, it's different. It's just different, okay? Maybe I-

Mel: 04:55 It's different!

Dan: 04:56 I want to stay! Go away I'm shutting the door!

Mel: 04:59 Okay. So what we've just demonstrated, and the reason that I asked you the first instance, and I guess we talked it through that you actually found it, sort of in a way, immoral to choose that virtual life because you have this preference for reality.

Dan: 05:12 Yes.

Mel: 05:12 In the second instance, all of a sudden reality didn't seem so good to you, did it?

Dan: 05:15 Well, I had a different reality, but yeah.

Mel: 05:19 You had a different reality. And this is an illustration. It's a thought experiment that has been commonly used to illustrate what's known as the status quo bias.

Dan: 05:25 Ooh.

Mel: 05:26 Yeah, the status quo bias. And the status quo bias is our tendency to prefer what is familiar and what we already know and to maintain the current state of affairs.

Dan: 05:36 So this sounds ... I feel like we did something like this. This was the default bias maybe, which is exactly like-

Mel: 05:42 It's similar to the default bias.

Dan: 05:42 ... like the default option?

Mel: 05:43 Yeah, which is that we stick to what we already know, but ... So it basically has a similar outcome in that we will stick with the current state of affairs most of the time or whatever's presented to us. The motivation underlying it is different. In the default bias, we talked about how when we have a whole bunch of different choices offered to us that the default one just seems easy. So we'll stick with what we know, but we'll do it because it's the easiest. It's just out of fatigue and laziness.

Dan: 06:06 Yeah. Just like going with inertia.

Mel: 06:08 Yeah. Not doing anything is easier than doing something. With status quo bias, we'll still maintain the current state of affairs, but the motivation behind it is different. The motivation behind it is not to avoid making a choice, it's to avoid change.

Dan: 06:20 Ah, so this is like old people getting angry about society progressing, perhaps.

Mel: 06:25 Sure. Yeah. It could be something like that.

Dan: 06:25 Or maybe like if, let's say, if I lived in a cute little village and there was a lake running by my house and there was a factory and the factory wanted to start dumping chemicals into the lake.

Mel: 06:36 Yeah?

Dan: 06:36 Go with me on this. The default bias, I would to do nothing because that's the easiest course of action. The status quo bias, I would be up in arms campaigning for that factory not to be there.

Mel: 06:49 That's right. So it actually motivates action to maintain-

Dan: 06:52 Got it.

Mel: 06:52 ... the current state of the affairs which are different to doing nothing.

Dan: 06:55 Yeah. It's like, "I'm going to do a whole bunch of work right now so I don't have to change later."

Mel: 06:58 Yeah. Hey, so I know we already did some research and you've already been a participant in one of my studies. Do you want to hear about some other research?

Dan: 07:04 Do I ever!

Mel: 07:04 I know you do.

Dan: 07:04 Let's look at some research.

Mel: 07:13 Okay. I sort of already gave you the most fun research about this, so what I'm left with is some really boring research to tell you.

Dan: 07:20 What? You don't find research boring.

Mel: 07:20 I know, but it's just not the most exciting. So we'll just sort of skim over it a little bit, but we will pay credit to the researchers.

Dan: 07:28 You've got to work on your sales game. We can talk about this.

Mel: 07:30 In 1988 Samuelson and Zeckhauser introduced the status quo bias to us and they basically did it by presenting different scenarios to participants where they had a choice to make that involved making a change. In some situations they were just given all these neutral options of what they could choose. So you're a serious reader of the financial pages, right? You know your shit when it comes to that. But until recently you haven't had the money-

Dan: 07:56 Potty mouth today. Jeez.

Mel: 07:58 Sorry. Sorry, mom.

Dan: 08:01 Kids in the car.

Mel: 08:01 You haven't had the funds to invest, but you've sort of known what to do. Then all of a sudden, Great Uncle Dave dies, so it leaves you with a whole bunch of money and now you've got the option. And your options are that you can invest that money in a high risk company, a moderate risk company, some municipal bonds, whatever it is the options that they were given, and treasury bills. So four neutral options are given and it's up to you. In the second option, participants were presented with the same scenario except this time that they were told that a large portion of the portfolio was already invested in a moderate risk company.

Dan: 08:32 In Great Uncle Dave's portfolio?

Mel: 08:34 Yeah. So there was already sort of a status quo of current state of affairs that you are probably going to be motivated to maintain and that's exactly what they found. That when the second scenario was presented, a much greater proportion of participants opted to just invest it all in the moderate risk company. Just stick with what we already have. Don't make a change.

Dan: 08:54 Yeah. I guess maybe where this comes to play as a heuristic is sometimes, I guess, our status quo bias gets us to make suboptimal choices. Maybe investing in a high risk or a lower risk company would have been the better option.

Mel: 09:05 Would actually be better.

Dan: 09:06 Objectively, rationally that would be the better option. But our over desire for status quo kind of overrides the better outcome.

Mel: 09:12 Yeah. So let's explore this a little further because why on earth would we be motivated to make a decision that is not in the best interests of our future, perhaps?

Dan: 09:20 Yeah, because being human is hard.

Mel: 09:22 So following this 1988 article by Samuelson and Zeckhauser, we had some helpful input from our buddy, Great Uncle ...

Dan: 09:29 Great Uncle Dave?

Mel: 09:31 No.

Dan: 09:33 Will Smith?

Mel: 09:33 Great Uncle Danny Kahneman.

Dan: 09:34 Oh, Danny Kahneman.

Mel: 09:35 Yeah. Kahneman, Knetsch, and Thaler in 1991 shed some further light on why we fall victim to this status quo bias. Now first of all, there's one sort of fundamental go-to reason that I can think of. Before we even go into Kahneman, this is Dr. Weinberg's view. Hasn't published it in a paper, but-

Dan: 09:52 Weinberg and Monheit, 2019.

Mel: 09:56 And it comes down to a simple word, survival. Because ultimately, before we do anything else, our underlying motivation for everything is to keep ourselves alive.

Dan: 10:06 Okay. Yeah, I see where you're going with this.

Mel: 10:06 And if you think about maintaining the current state of affairs, basically we might be wanting to stick with what we know because simply it has kept us alive to this date.

Dan: 10:16 Well, I'm alive right now. So therefore, whatever I'm doing right now is working.

Mel: 10:19 You've been doing something right. And so there's a huge risk involved in actually making a change.

Dan: 10:24 Yeah, like right now. Breathing, alive. What if I stopped breathing? Not alive.

Mel: 10:28 Don't do it. Not worth the risk.

Dan: 10:29 I see why this works.

Mel: 10:30 Right? So fundamentally we can understand why we would be inherently motivated to just keep things as they are.

Dan: 10:35 Yeah.

Mel: 10:36 Cool. It keeps us alive. Kahneman, Knetsch, and Thaler put it their own language of loss aversion.

Dan: 10:44 I remember this one.

Mel: 10:44 Yes. So we're highly averse to making changes because we don't want to take the chance that we might make a bad choice.

Dan: 10:51 Yeah. And so if I were to wind back to episode two, three, whatever it was, early we talked about loss aversion, was it where we feel losses twice as much as we feel gains?

Mel: 11:02 Yep. Yep. So if we were highly motivated not to lose, we're actually more motivated not to lose than we are to gain something.

Dan: 11:08 Twice as motivated not to lose.

Mel: 11:10 You could say.

Dan: 11:10 I just did that maths in my head right now.

Mel: 11:12 Wow.

Dan: 11:12 So I guess with the status quo thing, it's like, "Well, unless I can clearly see that changing is going to get me at least twice as good, I'm just going to stay with this."

Mel: 11:21 Right. So it's much easier to stay with what ... Well, it's not that it's much easier because that would be default bias, but we are much more highly motivated to not make a change than we are to make a change. Okay?

Dan: 11:31 That makes sense.

Mel: 11:31 The reason is that they say that disadvantages of leaving something loom larger than the advantages.

Dan: 11:38 Say that again?

Mel: 11:39 The disadvantages of leaving the current state of affairs loom much larger than the advantages or the possible advantages.

Dan: 11:47 So when you say loom larger, it's like in our mind we blow them up to be potentially disastrous?

Mel: 11:52 Yeah. Yeah.

Dan: 11:52 I mean, so I think that and also the wanting to stay alive survival thing make a lot of sense of why we would favor status quo. They're both kind of negative, like kind of fear-based.

Mel: 12:01 Welcome to psychology.

Dan: 12:04 Yeah, yeah. I mean, something else I was thinking about was maybe there might be some positive reasons why we're wired for this as well. And I mean, one of these is around the idea of compound interest ... just go with me on this. So in financial and wealth creation circles, what a lot of longterm level-headed wealthy investors talk about is the, in air quotes "magic of compound interest" and the idea that putting a dollar aside a day in your teens and in your 20s just has this insanely huge impact on your ultimate wealth in your 50s, 60s, and 70s because of compound interest. Every extra dollar you put in, you get interest on and then you get interest on the interest and that multiplied over days and weeks and months and years ends up being ginormous.

Dan: 12:46 And so it makes sense and it's very demonstrable through the data with money and you can calculate it for the money, but there's also, I guess, an idea that compound interest and the untold gains you get from compound interest extend to other parts of our lives as well. So it might be relationships or our health and wellness or fitness or our fields of study. And the idea that if you invest a little bit in the same relationship every day for 10 years, you are going to end up with a deeper, more fulfilling relationship by a significant order than if instead you'd invested in five relationships for two years each.

Mel: 13:17 Got it. I like this.

Dan: 13:18 Or if you study a little bit about psychology everyday you're going to be-

Mel: 13:22 Better for it in the long run.

Dan: 13:24 Than just trying to plunge yourself for a year into studying for it. So this idea that holding the line and just chipping away and doing a little bit of the same thing over and over and over again actually has exponential benefits, not just incremental benefits. Go status quo bias.

Mel: 13:41 Yeah. And it's funny how we think that we want change. How much do we think that we want change? We're like, "I don't like doing the same thing over and over again."

Dan: 13:49 Because change is interesting. It's fun. It's exciting.

Mel: 13:50 But compound interest says that actually we do change, it's just a more gradual sort of less-

Dan: 13:56 It's a boring change.

Mel: 13:57 It's a boring change, but that's okay. And the funny thing is, and we get this in happiness research all the time, that even though people are highly motivated to change their mood or to change their circumstances, we actually don't like it very much. And as soon as we do change our circumstances, we're highly motivated to adapt to it as quickly as possible. We want to make it as familiar as possible because we actually prefer familiarity even though we think we want change. It's like when we think we want choice with default bias and choice paradox and that. We think we want a whole lot of choice, but then when we're faced with a whole lot of choice, we're actually uncomfortable with it. It's like we think we want change, but actually we don't. As soon as we change something, we actually want to get to know it better. So if you moved to another city, you think, "Oh, it's going to be wonderful," but then things are unfamiliar so you'll just start taking the same road to work everyday to try and make it more familiar again.

Dan: 14:43 That makes sense. And I guess you look at the explosion of McDonald's in every country in the world and Starbucks in most countries in the world and people go to these countries for new experiences and then there's just a line of Westerners outside of McDonald's in Japan. Guys you all could have just stayed home.

Mel: 14:56 Yeah. We just want to know what ... We just want stability.

Dan: 15:00 Yeah. So I mean, this is interesting from a sales perspective because when you're selling to somebody, you have to convince them that change is good, but you also have to convince them that it's going to be okay and it's going to be familiar. And I guess it's interesting to think about the way that you play those two sides of the same coin.

Mel: 15:18 Yeah. I mean, because the whole thing is that people don't want to change because it's perceived as dangerous. So your job, I guess, is to show them that, "No, it's okay. It's safe. It's safe. Make this change. Let me take you along on this change. You'll be fine."

Dan: 15:29 I think it's interesting to think about this from two perspectives. One is from retaining existing customers, so selling more and different things to existing customers versus acquiring new customers. So if we think about retaining existing customers or upselling, upgrading existing customers, there's a principle from the world of design that I'd like to borrow and that principle is Maya, M-A-Y-A. It's an acronym for most advanced, yet acceptable. And so the idea with this is when you are designing a new interface, a new product, a new service, what your job as a designer is, is to push the design as far as you can, as advanced as you can, with a caveat - yet acceptable. So you can't push it so far that people don't know what to do with it. If you were going to redesign a remote control, it should be sufficiently better than the current remote control, but not so much better that people-

Mel: 16:21 People don't like it.

Dan: 16:21 ... are just confused and don't get it.

Mel: 16:23 And it's interesting to think because if you're a designer you probably want to be as creative and as innovative as possible and design the most incredible, amazing thing. The thing is you're not going to have much luck selling it, are you, if people aren't ready to accept it?

Dan: 16:35 Exactly. Exactly. So if you've got a client who's doing a little bit of work with you and you have this vision for them of how far you want to take their business and where you want to go, I guess the job as a salesperson is to work out, what is the furthest I can push them along this journey? Which might only be 10% of what you've got in mind at a time, but still making it acceptable-

Mel: 16:52 Keep it safe.

Dan: 16:52 ... and just the right amount of exciting and tantalizing, but everything's still kind of going to be cool. We're not going to change everything straight away.

Mel: 16:59 Okay, that makes sense.

Dan: 17:00 I think that MAYA principal is interesting from a retention perspective. From a new business perspective, where I really think about status quo bias coming into play is especially in B2B sales, so companies trying to sell things to other companies. And the reason this is a bigger issue in B2B sales is ... Well, there's a couple. Number one, usually with B2B sales the risk of changing from one software provider to another or one agency to another is high and kind of obvious. So it's like, "If I switch over from one IT system to another and it doesn't work, it is going to be disastrous and I'm going to lose my job and my whole team's going to be fired and we're going to cost the company millions and millions of dollars." Whereas, the benefits are a little bit hazy, a little bit unclear and they're probably not that good, like moving to a slightly better email system or a slightly better file sharing system. It's a marginal benefit traded off for a potentially catastrophic disaster. So that's one issue. And yeah, there's that saying, "Nobody ever got fired for hiring IBM." It plays right into that status quo bias. Just keep doing the same thing, don't mess it up. Don't shoot for the stars, don't mess it up.

Dan: 18:05 The other thing that makes B2B sales really susceptible to status quo bias is usually B2B sales are group decisions, and what we have when we have group decisions is you have lots of people with different opinions and different criteria for how they're making the decisions. Procurement might have a different lens to IT, and IT might have a different lens to Sales and Marketing, and Sales and Marketing might have a different lens to the Legal team. And what happens is all these people have different lenses and different things and different risks they're thinking about when they make these decisions, and all of these differences create conversations and arguments between lots and lots of people. And the more conversations and debates and arguments that you have, the more complicated it gets. And what happens when it gets more complicated and it gets too hard?

Mel: 18:45 It's not fun.

Dan: 18:46 It's not fun and we just default to status quo, and we just push the decision off. So because of that, status quo bias can be a real issue in trying to sell something into a business. And what's interesting here is the conventional wisdom of what you're meant to do in this situation is you're meant to divide and conquer. Let's say you're trying to sell on a new software system to a cross functional team, and you can see that everyone's got different criteria. So what you do is you basically build a case for the IT guy about what it's going to do for them, and then you build a separate case for the marketing people and what it's going to do for them, and then you build a separate case for the procurement people.

Mel: 19:20 This sounds like a lot of work.

Dan: 19:22 It's a lot of work, but these are usually big multimillion dollar deals, longterm deals, because once you're in the status quo is going to keep you in there. Normally the conventional wisdom is divide and conquer, win over one person at a time. And actually what seems to happen when you do that is you make it worse because you give people more things to think about and they just throw more complexity into the mix and you get less agreement between the group because they're all thinking about their own different things that you've given.

Mel: 19:47 They're all thinking from different perspectives. Yeah.

Dan: 19:48 Yeah. More conversation, more confusion.

Mel: 19:51 Much easier to just stick with the status quo.

Dan: 19:53 Exactly. So instead, what you're meant to do from a new customer acquisition perspective based on trying to overcome the status quo bias, is try and get everybody to unite around the common idea that doing nothing is the riskiest thing that you can do.

Mel: 20:07 Mm-hmm (affirmative). So you're talking about in terms of what we said before about the disadvantages looming larger than the advantages-

Dan: 20:14 Absolutely.

Mel: 20:15 ... of change and what you're saying is actually, what if we make staying the same actually look really disadvantageous?

Dan: 20:21 Yes. So rather than trying to sell each person in on the benefits, "It's going to save you some money and it's going to make you look better in your job and it's going to make your stuff a little bit quicker." That's really hard. Instead get everybody focused on, we call it the burning platform, the disastrous consequences that are only going to happen if we stay with the current situation and everybody can then agree, "Yes, you're right. Staying with where we are is terrible. We do need to change."

Mel: 20:45 And that even if change is terrible, actually staying with what we have is worse.

Dan: 20:49 More terrible, exactly. So think in B2B sense, that's like a multilayered, multivariate way of having to overcome this problem and when you move it over into the B2C lens, it becomes a lot simpler. So where we see this playing out in the B2C world is in the phone wars where now a lot of the conversation is around cameras, and Google are running a lot of ads showing how bad the photos will be with an Apple phone ... Sorry, an Apple phone? An iPhone. And how you're basically going to miss all these amazing moments of your kids or of your friends and family because you're using an inferior camera and it's too dark or it's blurry. So they've done that to make people feel like the status quo is really risky, and then at the same time they've invested in a lot of software that makes it very, very easy for people to pour their whole life from an iPhone over to an Android phone and, hey presto, they've been able to steal a lot of market share over the last couple of years.

Mel: 21:40 Cool.

Dan: 21:41 So that's what brands can do.

Mel: 21:42 Good tips.

Dan: 21:43 Yeah. Big. Dense. You can play it in slow-mo if there was too much in that. What about peeps?

Mel: 21:48 So just for the ordinary people out there, we've got to think of this status quo bias as something that is there to help us. At the end of the day, it's there to keep us safe. Yeah? That's what it's there for. Sometimes, and it becomes problematic when that emotional survival-based decision stops us from making a decision that's actually rationally in our best interest. So we need to actually be maybe more conscious of doing something so that we can actually flip the decision from an emotional one to a rational one. And this sort of applies for all things but specifically in the context of the status quo bias, when it comes to weighing up the pros and cons of making a change, sometimes something that's just really simple but very effective is just to make a list. Because when you think about the disadvantages and the possible advantages, we might go, "Oh, there's a few disadvantages but there's a whole lot of advantages" but the disadvantages actually seem in our head to be a lot bigger. They loom larger.

Dan: 22:41 Yeah. And they feel real.

Mel: 22:42 We focus on them. They feel a lot stronger, and so we're sort of more emotionally invested towards not going with the change and just because we don't want to lose. So sometimes if we just literally make a list, if we can turn the subjective experience into an objective one by literally writing down, seeing a list of, "Yeah, there's a couple of disadvantages. There might be three disadvantages, but there's 45 advantages," we're making or we can then make a more rational decision. We're better placed to make a more rational decision.

Dan: 23:10 Yeah. So what you're saying is, status quo bias prevents us making better rational decisions because we're deciding emotionally.

Mel: 23:16 Emotionally, yeah.

Dan: 23:16 What we should do is get out of that emotional decision making state and make it a rational decision.

Mel: 23:20 Make a list!

Dan: 23:20 Make a list!

Mel: 23:20 Simple.

Dan: 23:21 My mom was all over this. How many years did you study for?

Mel: 23:25 Simple things. Not relevant.

Dan: 23:32 Awesome. All right, so put a ribbon on this.

Mel: 23:32 Well-

Dan: 23:32 Oh, there's more?

Mel: 23:32 One last thing.

Dan: 23:33 Oh, good.

Mel: 23:33 We talked about things staying the same and sometimes people with status quo think, "Oh, but I don't want to stay the same. I want a change." So I just want to say, be okay with being boring.

Dan: 23:43 Oh. Are you saying I'm boring?

Mel: 23:46 No, just in general. It's okay to stick if you're sort of doing the same thing over and over again and being familiar. Recognize that being boring, like you said with compound interest, being boring and doing little things over time can actually have some advantages in the long run as well.

Dan: 24:00 All right, nice. Wrap it up for me. Status quo bias is ...

Mel: 24:03 The preference to keep things as they are.

Dan: 24:05 And sometimes that's good. Sometimes that sucks.

Mel: 24:08 You figure it out.

Dan: 24:09 For brands to get over this, we need to look at how we basically cause more risk to be associated with the current status while smoothing the transition over to something new. And for peeps, make a list.

Mel: 24:21 Make a list.

Dan: 24:21 That is five-star advice from Dr. Mel.

Mel: 24:26 That's what you get.

Dan: 24:26 I'm just trying to keep up here.

Mel: 24:27 All right, thanks for joining us and we'll see you next time.

Dan: 24:30 You'll hear us next time.

Mel: 24:31 That too.

Dan: 24:32 Awesome.

#22 Projection Bias: Why shopping whilst hungry is a terrible idea

We all know that empathy is in short supply, but we often don’t realise how hard it is to be empathetic towards our future selves. In this episode, Mel and Dan look at what happens when we try to make decisions for tomorrow based on how we feel today.

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Mel: (00:20)
Hi. Welcome to Bad Decisions.

Dan: (00:22)
The podcast that helps us understand why we choose what we choose.

Mel: (00:24)
Why we think what we think.

Dan: (00:25)
And how to exploit this stuff for fun and commercial gain.

Mel: (00:28)
I'm Dr. Mel Weinberg. I'm a performance psychologist.

Dan: (00:30)
I'm Dan Monheit, co-founder of Hardhat.

Mel: (00:40)
So Dan.

Dan: (00:41)
Yes, Mel?

Mel: (00:41)
So a lot of the time I found in our episodes gone by, that we talk a lot about your heroes. And it's fine, because you have crushes And that's fine. Everybody has crushes.

Dan: (00:54)
They're all called Dan. Did you notice that?

Mel: (00:56)
Wow.

Dan: (00:56)
Dan Ariely, Dan Kahneman, Dan Gilbert.

Mel: (00:59)
Yup. Yeah, wow. It's like it was meant to be.

Dan: (01:02)
Yeah.

Mel: (01:03)
So today we're going to start by talking about one of my heroes.

Dan: (01:07)
Someone called Dan. Is it Dan Monheit?

Mel: (01:10)
No, it is not you.

Dan: (01:10)
Because it's going to be awkward, I can leave the room if you like.

Mel: (01:12)
It is not you. But he does have a lot to do with ego.

Dan: (01:16)
That's awkward. I don't see what the two have to do with each other, but let's roll with the punches.

Mel: (01:20)
So we're going to talk about Freud.

Dan: (01:22)
Freud, Dan Freud?

Mel: (01:23)
No, no. Sigmund Freud, good old Sigmund Freud, grandfather of psychology, really and-

Dan: (01:31)
Sorry, in 2019, he would just be a pervy old man, let's be honest.

Mel: (01:34)
Look, currently you might think of him like that. However, when you actually go deep, reading deep into Freud, I wasn't going to say go deep into Freud.

Mel: (01:45)
You read deep into Freud and when you read deep into psychology, what you figure is that Freud had something to say about absolutely every phenomenon in psychology before anybody else said it.

Dan: (01:55)
I think he had the same thing to say about every phenomenon, which is it's all sexuality. He's basically Charlie Sheen before his time.

Mel: (01:59)
That's what happens when you don't read deep into Freud.

Dan: (02:04)
Okay, all right, I'll go deeper ... anyway, shortcut me, tell me what I need to know.

Mel: (02:05)
So I'm going to tell you something else about Freud. Freud did some really good work, you know who did some even greater work?

Dan: (02:09)
Who?

Mel: (02:10)
Freud's daughter, Anna. Yeah, Freud's daughter Anna because men start off stuff and then it takes their daughters to really clarify their thoughts and write things down in ways that make sense. Shout out to my dad.

Dan: (02:23)
Definitely no unresolved childhood issues here. Let's keep rolling for the people at home. What's so good about Freud?

Mel: (02:28)
Freud, Sigmund and Anna talked a lot about defence mechanisms, things that we do to protect our ego, and one in particular is the concept of projection. The idea that sometimes we will have feelings or thoughts or motives that are so unacceptable to us that we can't actually handle them ourselves. And so we externalise them onto other people.

Reporter Clip: (02:50)
"Well, that's because he'd rather have a puppet as president of the United States."

D. Trump Clip: (02:53)
"No puppet, no puppet."

Reporter Clip: (02:55)
"It's pretty clear."

D. Trump Clip: (02:55)
"You're the puppet."

Mel: (02:56)
So a classic example of this would be a person who thinks that everybody is judging them. And thinks that there's something in the environment that is threatening to them. Everybody's judging them, they don't feel safe doing something. And actually nobody's really thinking about them at all. And we've talked about this with regard to another heuristic. That actually, nobody's thinking about them at all and it's rather a projection of their own internal lack of confidence.

Dan: (03:22)
They think they're shit so they think everybody else thinks they're shit.

Mel: (03:25)
That's right. And another way that we can think of projection is into ... if you look at an example from couples.

Mel: (03:40)
For example, you've got a couple and you've got the man, because it's always the man, who is considering being unfaithful. And has had some thoughts that perhaps they're going to be unfaithful. That makes them feel really guilty. They don't like it at all. So sometimes what happens is they'll project that onto their partner and what they'll do is they'll start acting in ways that suggest that they are suspicious or somehow distrusting of their partner. Their poor partner is left going, "Wait, I haven't done anything. I don't know what you're talking about." It causes a lot of conflict and it's all coming from the one member or the one partner who's actually feeling like they might do something bad.

Dan: (04:21)
"I'm not cheating. You're cheating."

Mel: (04:22)
Exactly. So we project things onto other people. It's part of our basic defence and it's an external projection.

Mel: (04:29)
Something that I thought might be relevant for discussion today is actually that we tend to project intrapersonally as well as interpersonally. Intrapersonal, within ourselves. And what I mean by that is that we actually project our current self onto our future self. And this is the idea that's referred to in the field of behavioural economics as the Projection Bias.

Mel: (04:57)
It took me a while to get there. But I got us there, didn't I?

Dan: (05:01)
Yeah, yeah, I'm here now. Projection Bias. So hang on. For those playing along at home, this is a thing that, classical psychology, we talk about projecting our feelings onto others and kind of maybe lacking the empathy that not everybody would think the way we think or feel the way we feel. I'd say one of the people we have a lot of trouble empathising with is actually our future selves. Like thinking that future Dan would actually have a different set of preferences than current Dan.

Mel: (05:24)
I guess one of the people who was really a pivotal in this space was Loewenstein. Loewenstein's done a lot of work in this space. And in 1996, he termed this, the 'intrapersonal empathy gap'.

Dan: (05:35)
All right, well, I'll tell you what, I just had some firsthand experience with the intrapersonal empathy gap, not knowing that's what it was called at the time. But I was back at my parent's place over the weekend and you know how you just kind of rummage through your old stuff. And yeah, really struck me in the face that at some point in my life, probably as 15 year old Dan, I just could not imagine a time my life where I would not think Green Day was the greatest band of all time. I had all of their music and I used to listen to them religiously and I spent all this extra money on these limited-edition things and T-shirts thinking that I'm always going to like these guys. It didn't take long for me to not like them so much anymore.

Mel: (06:14)
No. Past Dan who was current Dan at the time, couldn't actually project that future Dan might think differently. Sad when it comes to preferences for Green Day.

Dan: (06:25)
Are they still around, Green Day? If you're out listening to the show, hit us up.

Mel: (06:29)
Longtime fan.

Dan: (06:29)
Yeah, love you guys, love the work you do. Hope you had the time of your life and the early stuff, Dookie that.

Dan: (06:34)
Anyway, the thing that got me thinking though is back when I was a boy, you know, in the late nineties, yeah, late nineties still most of them-

Mel: (06:43)
Eighties? What sort of a boy?

Dan: (06:45)
We're talking about high school. When you're at an age where you actually can make terrible decisions that ignore what your future self is going to be like. I did absolutely make some terrible decisions. I listened to some shit music. I bought some terrible clothes, like I had yellow pants that I was really proud, like baggy yellow pants I thought were really cool and couldn't understand why I'd get knocked back from night clubs in them.

Dan: (07:03)
I had some really bad haircuts.

Mel: (07:04)
Yeah, I've seen pictures. It's true.

Dan: (07:06)
Yeah. I had some good haircuts. If we had show notes, we'd put them in there but we don't so we won't. And I got some piercings, that was the thing to do late nineties, early 2000s-

Mel: (07:14)
Dare I ask where?

Dan: (07:15)
Eyebrow, tongue ... we'll probably leave it at that. But the thing is all of these were basically temporary so that even though I didn't realise at the time that future Dan is not going to want to always wear yellow pants or have an eyebrow piercing, like it's fine. It was all pretty forgiving. And one of the things that got me wondering about is like the youth, youth of today-

Mel: (07:35)
Oh, young kids today.

Dan: (07:36)
Yeah. I mean, a lot of the decisions these guys are making are not that temporary. Your older self might not want their neck tattooed. And it's like if I had just permanently tattooed yellow pants on and was living with that now as a 38 year old going to client presentations, I think it'd be difficult. So anyway, I understand. I empathise.

Mel: (07:54)
And that feeds right into the Projection Bias, which is the tendency to project our current preferences into the future, as if our future tastes and preferences will match our current ones. So yes, of course we would want that neck tattoo in the future because future self is just me plus neck tattoo.

Dan: (08:07)
Exactly, and I'm already happy now, so imagine how much happier I'm going to be then!

Mel: (08:10)
Exactly. I guess the sort of key research in this space, because I love to talk about research.

Dan: (08:15)
Yep, love the research.

Mel: (08:22)
It's Loewenstein again, Loewenstein and his buddies in 2003, they were the ones who coined the term, Projection Bias. The paper is quite economical, but-

Dan: (08:31)
As in it's printed on very cheap paper?

Mel: (08:34)
No. They look at it from a perspective of ... from an economical perspective in the sense that they have formula to try to predict people's behaviour based on the Projection Bias. That's what I mean. They draw on a piece of research from Read and van Leeuwen in 1998 that had to do-

Dan: (08:51)
Big year for Green Day. That was, actually.

Mel: (08:52)
I'm sure it was. That had to do with predicting hunger. Because hunger's one of the things that is ... we're really vulnerable to the Projection Bias when it comes to hunger. They ask people to predict in one week whether you would like to receive some fruit or some junk food, healthy or unhealthy option.

Mel: (09:13)
Okay? And what they found was that people's preferences were entirely dependent on their current state. Which means if you are hungry now, you'd really love some junk food in a week's time, because you're projecting your current hunger onto your future self and saying, "Future self don't want fruit, future self is going to be starving. Give me some cake."

Dan: (09:31)
Yeah, because I'm starving now, can't imagine not being starving, what would that even feel like? Who knows?

Mel: (09:36)
Exactly. Exactly. So isn't it interesting though, how we make a lot of these decisions about what we want in our future based on how we feel right now? And we've talked about this in the context of some of the other heuristics that's come into play in temporal discounting, the planning fallacy, the focusing illusion, right? It's all part of that. But this is all about how we project our current state onto our future self and how we're so bad at predicting what future self wants and needs. Because current self totally dominates our awareness.

Dan: (10:06)
So wait, just to tie up that piece of research and make sure I understand it. So what we're saying is people have to decide, in a week you're going to get a snack. It's either going to be fruit or chocolate. If I'm hungry now, I want chocolate now, so I'm going to just assume I want chocolate in a week. If I'm not hungry now, I'm probably going to make the better health choice and pick fruit now and I can't imagine being starving in a week and actually preferring chocolate. So I'm going to pick the fruit.

Mel: (10:23)
Yeah. And this is all very much being related to the concept of affective forecasting, which our boy Kahneman had a lot to say about. And we really can't go an episode without mentioning one of your heroes that-

Dan: (10:32)
DK.

Mel: (10:35)
... this idea that we imagine when we project into the future, that our future self is just the same as our current self, but they have that extra thing that we desire. And what we do is we fail to account for the fact that our future self is actually different to our current self. Our future self might have different beliefs. Our future self has had different experiences that might lead them to have different attitudes, different values, different feelings about things.

Dan: (10:57)
Yeah, people change.

Mel: (10:58)
We don't take any of that into account. And there are some instances, I guess, in which we are more likely to totally ignore that. And it depends on the thing that we're, or I guess, the need that we're looking for at the moment. So if it's a more primal need like hunger, then our desire for food in the moment is going to completely outweigh anything else.

Dan: (11:17)
So you were talking about infidelity before. I guess it's kind of the same thing, right? It's like ... we're going to get into weird territory here. It's like I really want to indulge in that experience right now and I can't imagine a time that I wouldn't want risk my whole life and livelihood to indulge in that experience.

Mel: (11:33)
I think of it the other way, if we're going to talk about it in terms of relationships, I think about it in terms of what happens when people have a breakup, right? You know that instant feeling of disconnection and detachment and feeling completely alone and it's a miserable feeling to go through a breakup. A lot of people are familiar with that and in those times, it's so difficult for you to imagine a future self that could be happier.

Dan: (11:54)
"I will never love again!" It could be guys and girls saying that.

Mel: (11:58)
Yeah. But we get so caught up in that and because that need for connection and closeness with another person is so primal, it heavily dominates our perception of future self. So it's just too hard to think of a time in the future where this could not be a problem for us because it is such a big problem for us right now.

Dan: (12:13)
Yeah. I mean I know you looked at some research, which is great. I also looked at some research. I don't know if ... Kops do I have different research music?

Dan: (12:21)
And that is what I call research music. I can't imagine ever not loving that research music. Anyway.

Dan: (12:51)
It's interesting to look at purchase decisions that people make today, for things that they are going to have or use for a long period of time. And it's interesting you think that sales of convertible cars would tend to be more in summer than they would be in winter, but they also spike on days where it's kind of wintery but you get a short burst of hot weather. And the same thing happens with sales of houses with pools as well, where you get one beautiful, perfect day where it would be amazing to drive around in a convertible. Even though it's kind of in the middle of winter.

Mel: (13:22)
Yeah. And all of a sudden, everybody wants a convertible then.

Dan: (13:24)
Yeah. And even though your rational self knows it's not going to be like this every day, there's still clearly a part of a lot of people that just says, "Yeah, this is a great day to buy a convertible because I'm always going to want to do this, it is always going to be like this." I think same thing happens in the world of apparel where if you're selling seasonal goods, so if you're selling hats and scarves and things like that, a whole week of kind of chilly weather is not going to be as good for you as-

Mel: (13:48)
As one freezing cold day.

Dan: (13:49)
... one or two freezing cold days, where people are like, "Holy crap, I need gloves and mittens and scarves and hats and everything." Even though the forecast says it's not going to be like this in three days. "I just can't imagine it ever not. I can't ever imagine not feeling this cold again."

Mel: (14:02)
Yeah. I guess, from a brand perspective, how can you take advantage, not that we want to take advantage of people, but how can you leverage the Projection Bias in your marketing?

Dan: (14:13)
Yeah, like we're certainly not here to take advantage of people. We're just here to read the play and make the appropriate move. So I think there's a couple of things here. I mean, one as as a quick hitter is that conditions are not always perfect for selling whatever we sell. And so this is probably more of like a media recommendation, where it's like being able to be really agile and so that if you are selling scarves and it is a day where it is unseasonally cold, how hard can you go? How much of your marketing concentration can you focus on times when people are most likely to buy and people are most likely to buy when they're projecting that the future is going to be much like today and today's the perfect time to buy the thing that you're selling. So that's one thought.

Dan: (14:54)
The other thought is this idea of taking people's motivation, that is often a short-term, shortlived thing, knowing that they think they're going to be motivated like that for a long period of time and wrapping something around it. And where we see this quite prevalently is people turning product purchases or one-off purchases into subscription purchases. So you might imagine at some point in time, not that long ago, going to the gym was probably a thing that you would turn up and you would pay five bucks and you would go and have a workout-

Mel: (15:20)
Pay as you go.

Dan: (15:21)
Exactly and then leave. And what gyms very quickly realised was that hey, you're here and at six o'clock in the morning, you must be feeling pretty motivated and your Projection Bias is probably telling you you are always going to be this motivated.

Mel: (15:31)
You can't even imagine a time in the future when you're not this motivated.

Dan: (15:35)
Exactly. "Gym's great! Here I am." We're going to just leverage that into a 12-month membership. Because why wouldn't we? Because clearly you're always going to want to do this.

Dan: (15:44)
And so gyms are quite a common example. But I think what we've started to see through the explosion of e-commerce and especially direct-to-consumer businesses, lots of things that were just bought once as products are now bought as services. So you think, okay, it's a Wednesday, I've got a few people coming around this weekend, I'd like to buy a bottle ... some mixed wines, six bottles of wine. I can go and do that once, or, people are going to try and sell me on a subscription service where I get six bottles of wine delivered every month and because I'm in a hot state now and think that would be a great thing, I can't imagine who would not want a mysterious box of goodies, be it wine or chocolates or anything else to turn up every month?

Mel: (16:18)
Yeah, it'd be wonderful, isn't it? Because we are the same person, month to month to month.

Dan: (16:22)
I always want wine and chocolates.

Mel: (16:23)
Says Projection Bias.

Dan: (16:24)
Yeah. Here's my credit card. That's the one thing that doesn't change, my credit card details. You just keep running that until it don't work no more.

Mel: (16:30)
Yeah. And look, the Projection Bias, like all the other biases and heuristics that we discussed can lead people to make, well maybe decisions that are not in their best interests, but your job I guess, as a brand or as a marketer is to convince them that actually it is in their best interests.

Dan: (16:45)
Well, sometimes buying things on a longer-term basis is in people's best interest. One of the biggest issues in our industry, in the ad industry at the moment is how much work has moved onto project-by-project basis. And I think what, as an industry, we're not doing a very good job of is taking all of that excitement that a client has about engaging an agency and saying, "You are going to want this often." You do not just want this for six weeks while we deliver this one thing for you and then desperately wait for the phone to ring again. You want the benefits of this all the time and that is not just beneficial for agencies. It's actually beneficial for clients to have people in agencies thinking about them all the time, not just for that short window that they've been set on a project for.

Mel: (17:21)
Yup, that makes sense.

Dan: (17:22)
That's what I think.

Mel: (17:23)
Have you got any other examples?

Dan: (17:26)
No. That was not enough examples for you?

Mel: (17:27)
No, I'm hungry for more.

Dan: (17:29)
To be honest, when I wrote these examples down, I just thought my future self would only want two or three.

Mel: (17:34)
Well-played.

Dan: (17:34)
Here I am, enjoying them. Wishing that I packed some more.

Mel: (17:37)
Well-played, so what do we do about this? We know what brands do about it. What do people do about it?

Dan: (17:41)
Why are you asking me?

Mel: (17:44)
Well I'm not, I'm just sort of putting it out there as a rhetorical question. And here we go, I will answer it.

Dan: (17:47)
Because I'm going to struggle to answer. I don't know, Mel, what should we do about this?

Mel: (17:51)
Well, I mean, one thing is to maybe have a bit more empathy for future self, right? Because this is all based on us not having or having an empathy gap. And maybe taking into consideration that if we have this empathy gap, maybe making a decision in the long-term is not in our best interest, is it or isn't it? What's going to change, what's likely to change? What are some ... almost like we talked about in the planning fallacy, playing devil's advocate to our own future selves and going "future self wants this. Wait, does future self really want that? Is this tattoo really a good idea?" Just second guessing.

Dan: (18:26)
Tattoos are cool if you have one on your neck. That's great. I just hope you still like it when you're old.

Mel: (18:30)
Yup. So another time that we see this, another time that we can actually do something about it is the old trip to the supermarket. You know everybody says, "Don't go to the supermarket when you're hungry." Why not?

Dan: (18:40)
This is because Projection Bias.

Mel: (18:42)
Because current self is hungry. We go to the supermarket, we buy all sorts of things. We think we're going to make dinner for the next four nights in a row and turns out we have a couple of bites and yeah, we're not that hungry anymore. So if we understand that future self is actually not going to be as hungry as current self is right in this moment, once I've had a couple of bites, then we can sort of slow down, probably save a lot of money.

Dan: (19:05)
So you're advocating stealing grapes in the supermarket as you walk around. Just to take the edge off the hunger and make better decisions.

Mel: (19:11)
I've never done that.

Dan: (19:13)
Melissa Weinberg this is scandalous!

Mel: (19:16)
No, but it is. It can be a good idea. Have a snack as you go through the supermarket ... no, no, you pay for it! You know what you do? You go to the nuts section. And you fill the bag up with some of those nuts. You print it based on weight and you pay for it, but you eat them on the way.

Dan: (19:30)
Life advice, life advice, guys.

Mel: (19:30)
So by the time you've got to the register the bag's empty. But the price tag, you're still paying for it.

Dan: (19:36)
Of course you are.

Mel: (19:36)
It's not stealing. No. It's just having a snack as you go through to counteract the Projection Bias.

Dan: (19:40)
You know what? I feel like we were really wrapping up this episode, but we've just gone down a whole different rabbit hole.

Mel: (19:46)
So don't go to the supermarket when you're hungry. The other thing is when it comes to supersizing meals. You know how you're often asked, "Oh, would you like to up-size or would you like the regular or the large?" And me, because I'm somebody who loves to eat with my eyes. I'm like, "Oh my God, I'm starving. I want the large." I never need the large. Never, never need it.

Dan: (20:03)
So what's your advice? Don't order the large. That's profound.

Mel: (20:07)
Don't always get the large.

Dan: (20:08)
We've really gone deep on this episode.

Mel: (20:10)
I mean if it's, look, if it's a marginal ... if it's a dollar difference and you can afford it, go the large, but really you don't need it. Future self is not that hungry. Future self has actually eaten.

Dan: (20:22)
Future self can come back and buy dessert later, if you're still hungry. Get a medium and see how you go.

Mel: (20:25)
That's it.

Dan: (20:25)
All right.

Mel: (20:26)
But current self is not probably the best person to make decisions for future self, especially when it comes to food.

Dan: (20:31)
Let future self decide for future self?

Mel: (20:32)
Let future self be his or her own person. Let her evolve and let her be a person who has the right to make her own decisions about what she wants.

Mel: (20:41)
The last piece of advice. That when we're not, it doesn't have to be in the supermarket, but remembering that Projection Bias is going to occur in the current moment. Let's just slow down a moment. Sometimes we don't always have to make decisions right here and now. Sometimes there are decisions that we can wait a little while and so that's like what we were saying before that if future self is a little bit in the future, a little bit further in the future, let future self make that decision.

Dan: (21:02)
That's where future self tends to be.

Mel: (21:04)
Yeah, we have worries, and I talk about this with clients all the time in practice that sometimes there are worries for now, and sometimes there are worries that belong to you, and sometimes there are worries that belong to future you, and let future you have those worries because future you is actually going to be okay and future you can handle those worries.

Dan: (21:19)
Oh, that's an optimistic way to end. All right, so let's put a wrapper on all of this. So Projection Bias, inability to empathise with our future selves and therefore making decisions today on the assumption that we will always feel like we do right now.

Mel: (21:34)
It's a bias. Yeah. And it'll work out.

Dan: (21:36)
Things we can do if we're selling stuff are to go hard when the conditions are right or look for ways to convert a one-off purchase into an ongoing subscription-type service. Because people will think that they're always going to want that thing. And as individuals we need to slow down. Leave future decisions for future self.

Mel: (21:53)
Perfect.

Dan: (21:54)
And buy the nuts.

Mel: (21:55)
Don't go to the supermarket hungry.

Dan: (21:55)
Don't go to the supermarket hungry. Good. That's a wrap. All right. Thank you so much. Seeya.

#21 Effort Bias: Why you should let them see you sweat

Why do we teach kids that it's all about the effort, when as adults, we're far more concerned about the outcomes. In this episode, Mel and Dan look at why 'quicker and easier' could be the exact opposite of what we really want.

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Mel: 00:18 Hi, and welcome to Bad Decisions.

Dan: 00:20 The podcast that helps us understand why we choose what we choose.

Mel: 00:23 Why we think what we think.

Dan: 00:24 And how to exploit this stuff for fun and commercial gain.

Mel: 00:27 Ethically.

Dan: 00:27 Always ethically.

Mel: 00:28 I'm Dr. Mel Weinberg, I'm a performance psychologist.

Dan: 00:31 And I'm Dan Monheit, co-founder of HardHat, a creative agency built for today. So, you wouldn't believe it, Mel.

Mel: 00:43 Tell me.

Dan: 00:44 Once again, Australia was going to the polls. This morning or yesterday or something. Who's our current Prime Minister?

Mel: 00:50 Who knows?

Dan: 00:51 It's Joe Moe? Momo. ScoMo. Anyway, someone's decided that everybody needs a free hotdog and we're going to go and vote. Are we voting for a new prime minister again?

Mel: 01:02 Apparently.

Dan: 01:02 This has got me thinking about this weird thing that we seem to do where voting for a new Prime Minister, you need to ask yourself what millions of people will be asking themselves, "Will this person be a good Prime Minister?"

Mel: 01:17 It's a tough question.

Dan: 01:18 It's a really hard question, and there's a lot of facets to what would make someone a good or a bad prime minister, and it made me realise, one of the things we seem to do is we substitute easy questions for hard questions almost without out brain knowing.

Dan: 01:31 So it's like, "Will this person be a good Prime Minister?" "I don't know. That's really hard, ask me an easier question." "Is this a nice person? Would you like to have a beer with this person?" "Yeah, okay, yeah. I probably would. Well, therefore they would probably be a good Prime Minister”.

Mel: 01:44 Much easier question, "Hey, who do I want to go to lunch with?"

Dan: 01:47 Yeah, and I was thinking how the same thing probably happens with investing in publicly listed companies as well. So, you say, "Should I buy shares in Tesla?" And you go, "Well, is the current Tesla share price the right price?" "I don't know. Like there's a lot of very hard maths that I would need to do to work out, a lot of things I don't understand." So, an easier question I can substitute for myself is, "Do I like the Tesla brand?" "Yes, then I should buy shares in it."

Mel: 02:12 Yeah, I mean this is basically why we have heuristics. Right? Heuristics are shortcuts. They substitute really hard questions for easier ones that we much prefer.

Dan: 02:22 Yeah, totally, and so I guess one of the places where we often are asking ourselves a hard question is, "Is the price for this thing correct?" Or "How much is this thing really worth?" And we found a lot of ways to give ourselves easier questions to answer. So, we look at tricks like, "What is the price of this item?" Or "What is the brand of this item?" Or "What is the shop that I am buying this item from?" And we try to use all of those things as easy answers, and it seems that one of the other interesting ways that we try and determine the value of something is, "How much effort went into making this?"

Mel: 02:59 Good, Dan. See, you're giving us the effort heuristic!

(music)

Mel: 03:11 The effort heuristic basically describes how we will ascertain the quality or the worth of an object by our perception of how much time and effort went into it. So, we substitute effort for quality. Effort's our shortcut for quality, and we've talked about shortcuts in a lot of different episodes, one of the ones that quickly comes to mind is the availability bias.

Dan: 03:36 Is it available for you? That episode?

Mel: 03:37 It's easily available to me, yes. In that episode we talk about how availability is a shortcut for the frequency of something, and just like that, in the effort heuristic, effort becomes a shortcut for quality.

Dan: 03:49 Yes, I mean it would be great for people to know that each of these shows take us like, what is it? 17-18 hours of research?

Mel: 03:55 So long. Yeah.

Dan: 03:56 30 hours of recording, which we lovingly edit down to 18-22 minutes. But there's no point telling people that, but if they knew, they would really rate these shows a lot more higher than they do.

Mel: 04:08 There are a couple of reasons why this effort heuristic exists and sort of why it's there to help us. You've got an example from an evolutionary perspective?

Dan: 04:15 I was just thinking that today things are pretty complicated. Trying to work out the value of a set of AirPods is pretty tricky, because there's a complex process for how they somehow get invented and then end up on a shelf in front of you, but at some point in our past there's probably a much tighter correlation between effort and quality, because you're probably buying things from the people who made them by hand.

Dan: 04:36 Everyone was kind of like a craft person or an artisan, and within reason, the more time somebody spent making a horseshoe or a sword, or a basket, probably the better and higher quality that item was.

Mel: 04:50 Yeah, so you're basically saying that there was a reason why effort would be a good substitute for quality. It makes sense, right? Back in the day, and if we take that to today's society, there's a concept called learned industriousness. Yeah, fancy word. To basically describe how effort gets rewarded, especially when you're younger. You put a lot of time into something, you put a lot of effort into something and you're told that will get you the outcome, because of that, effort itself gets rewarded and it's a weird thing, because if you think about effort, about what effort involves, if it involves physical exertion, you're putting in effort when you're fatigued by it, right? So, it's something that we would typically avoid, but according to learned industriousness what actually happens is because that effort gets reinforced we learn to love it.

Mel: 05:33 You've run marathons?

Dan: 05:36 I've ran a marathon. I ran most of the marathon and hobbled some part of it.

Mel: 05:38 Right, and you put yourself through a lot of hard work. You put yourself through a lot of physical exertion, you put in a lot of effort, but you loved that. The effort actually got rewarded.

Dan: 05:47 Yeah.

Mel: 05:48 So, instead of the effort being something aversive, something that you avoided, you trained week, after week, after week, and you pushed yourself. A lot of athletes do this, I'm putting you in the category of athletes.

Dan: 05:56 Whoa, yes.

Mel: 05:57 A lot of athletes do this.

Dan: 05:57 I'm an e-sports athlete now.

Mel: 05:59 That'll do. But you put in the effort, and you actually enjoy it. People say they loved the grind.

Dan: 06:04 Yeah, so you reckon that's a learned thing. Because that's not natural, right?

Mel: 06:07 Well, we've been conditioned to actually enjoy the effort.

Dan: 06:15 Yeah, I think you're right. If I think about school, there is this idea of romanticising effort, that hard work is good, which it probably is to a degree, but also sometimes people need to work harder just because they're less good to start with, right?

Mel: 06:26 Speaking of hard work and degrees takes me back to my academic days with loads of marking, and one of the worst things that you have to do in academia is marking, and one of the things that happens is the students will come back and complain about their grades. If I can tell you the number of times that students came to me and said, "I only got a credit? But I put so much time into it, but I put so much effort into it!" and I don't know, call me a hard ass, but it still wasn't any good.

Dan: 06:53 They were trying to punk you with the effort heuristic, right?

Mel: 06:56 I'm not falling for that. You're still getting a credit.

Dan: 06:59 So what we're saying is often times effort does not directly correlate to goodness.

Mel: 07:02 Right, and so we can make errors because of the effort heuristic. We sometimes overestimate the correlation between effort that gets put into and the outcome. Sometimes there are a whole bunch of reasons why the effort doesn't necessarily correlate so strongly with the outcome. Like if somebody's just not very talented for example, you could put in all the effort in the world, but the outcome's still going to be subpar.

Dan: 07:26 I guess this all feels pretty natural and we can all think about how we could convince ourselves to think that something that took more effort would be worth more, but surely somebody somewhere in the world has put in the effort, the highly valuable effort, of connecting some research on this.

Mel: 07:42 Well, would you believe they did?

Dan: 07:45 This is amazing.

Mel: 07:51 And it took four authors of the study back in 2004.

Dan: 07:54 Wow, this must be a pretty good paper. Four authors!

Mel: 07:56 Yeah, Kreuger et al. It's known as the Poem Study, and they split people into two groups, and they gave then a poem to read, and they asked them to rate the quality of the poem. They asked them, "Did you enjoy the poem? And if this poem were to be sold to a poetry magazine, how much do you think it would be worth?"

Dan: 08:21 A poetry magazine?

Mel: 08:21 Yes, that was the study.

Dan: 08:22 What year was this study done?

Mel: 08:23 2004. When poetry magazines were all the hype.

Mel: 08:26 But they gave both groups a whole bunch of information about the author of the poem, about where they came from, their name, etc. the only thing that was manipulated was how long they told participants that the author spent writing the poem. Group one were told that the poem took four hours to compose, and group two were told all the exact same information except that the poem took 18 hours to compose.

Mel: 08:55 Would you know it, at the end of the study what they found was that the group who were told that the poem took 18 hours to compose rated the quality of the poem as much higher, and it's worth much higher.

Dan: 09:06 Surely not. Surely not.

Mel: 09:07 Uh huh. Believe it.

Dan: 09:09 Surely these guys didn't stop at poetry, though.

Mel: 09:11 There were a couple of other studies.

Dan: 09:16 Yeah. Which we aren't going to talk about?

Mel: 09:16 Well, we could talk about one of them had to do with rating the quality of paintings for example. They had a group of non-experts and then a group of self-identified experts, and just to throw it out there, I'm critical and curious, and suspicious of anything that asks people to self-identify as experts.

Dan: 09:31 Well, I think what's great about this story, because what happened to the self-identified painting experts?

Mel: 09:36 Well, wouldn't you know it, they rated the quality of the paintings much higher, if they were told that the hours spent painting them were longer.

Dan: 09:45 Yeah, so basically everybody got punked, including the self-identified experts.

Mel: 09:48 Exactly.

Dan: 09:50 So, I mean this is really interesting, but also kind of troubling as somebody that has a business that is in the world of selling ideas. It's really hard to assign a value to an idea, and a weird thing that's happened in my industry, and in a lot of other industries like ours, is that clients want ideas. They don't know how to value them. So, what everybody just kind of agreed we're going to do, is we're just going to quote and pay based on time/effort. Even though everybody really knows that this is a horrific approximation for how much value is created.

Dan: 10:26 The idea of trying to break the paradigm that we pay people for hours is just far too big and far too confusing. So, the approximation we use in our industry for value is also effort.

Mel: 10:37 Yeah, so the people will have ideas like a light bulb, it will come to them.

Dan: 10:40 Yeah, I mean how long does it take to crack a campaign idea, like your whole life plus five seconds. So, you can charge a client for your whole life. Tried. Didn't work. You can't charge a client for five seconds, because that's going to come out like $1.30, on a good day, so you kind of have to find something in the middle and some businesses do manage to crack some model where you do value based pricing.

Dan: 11:00 Like "What is the value of this idea to your business, and how much can we improve sales, or other key metrics?" But the reality is, it's so complicated, if you come up with a new tagline for a brand, and then you see sales go up, it might have been because of the tagline, or it might have been because of better distribution, or it might have been because they're competitor ran out of stock and nobody could buy them, or it might have been because the weather was good or bad. It's so hard. So, it's like, "How about we just pay you for the hours that somebody spent thinking about this, or not thinking about this, but were meant to think about this?"

Mel: 11:27 Right. So, if we understand that effort is used as a substitute for quality, tell me please how can brands use this to their advantage?

Dan: 11:34 This is exactly the right starting point, because while it would be good to try and convince people that this is not always the best way to value something, that's really hard. So, if we just lean into the fact that this is what people think is happening, the long and the short of it is, what we need to do is find ways to, I want to say make our processes longer and more complicated, but really what I mean by that is, not to manufacture fake things. Most things that people do, do have long complicated processes, and I think the way we need to play this heuristic is to make those long complicated processes more visible to the people we're selling to, than they otherwise would be. And a lot of the time we don't even notice the complexity, because we're in it all the time.

Mel: 12:14 Yeah, so there's some examples of that, right?

Dan: 12:16 Yeah. Of course there are. So, we see this in a bunch of places. One of the things I like to think about is restaurants. If you designed and built a restaurant anytime up until, I don't know, call it 10 years ago, there was a pretty predictable format where you have all of the service areas out the front, and then kind of hidden away behind a wall you have all the kitchen staff.

Mel: 12:36 So nobody sees the mess.

Dan: 12:37 Nah, don't see the mess, don't see anything. The food just magically appears through these doors. If you look at the trending restaurants in the last 10 years, every hot restaurant, at least in Melbourne and Sydney, I'm sure other places in the world, the kitchen is smack bang in the middle of the restaurant.

Mel: 12:51 So much fun. It's so much more fun that way.

Dan: 12:53 It's so much more fun! And not only is it in the middle of the restaurant, but there are seats, and I think often the best seats in the house are sitting around the kitchen watching the people craft the food. So we are not only exposing, but we're probably celebrating and romanticising the effort that goes in, and it seems that people are more patient and happy to pay more when you can actually see what is taking the time and the effort going in.

Mel: 13:15 And if somebody were to do research on that, if there isn't some already that we just haven't looked up, I'm sure they would enjoy the quality of their food and rate the quality of their food much better.

Dan: 13:23 Yeah, without a doubt. When you've seen the chef cut the sashimi right in front of you, you can't help but think that it's fresher and more expertly prepared.

Dan: 13:34 Some other places we see this stuff happening: we often used to talked about comparison websites on the internet, and when I say we used to talk about this, nerds in my industry used to talk about this, and the idea that often historically, and maybe it's still the case, those comparison websites were slowed down. So, you go into one of these websites and you say "I want to find flights from Melbourne to LA," and it could find that for you in half a second, or faster, but the perception is, "Well, if it only took half a second, like did you really go out and have a look at all of the possible places you could find airfares?" So, the idea was that these websites were slowed down a little bit to give the perception that they were doing a better job, there was more effort going into it, and therefore a more valuable outcome that come out the back of it.

Mel: 14:17 Tricky, isn't it?

Dan: 14:19 Yeah, the last probably interesting example I see of this is, if you think about tracking packages that come from overseas, we've all become accustomed to the idea that you buy something on a website, then you get a tracking number, and you go and look it up, and while in one respect you're looking it up just because you want to know where it is and how far away it is, what companies like DHO and FedEx have done an amazing job of, is showing all of the little steps that have happened.

Mel: 14:43 Every time somebody's touched it.

Dan: 14:44 Yeah. It got moved from the left side to the right side of this warehouse in this city, and then it got put on a truck and moved 200 meters down the road to a different dispatch facility, and then somebody put a sticker on it with your name on it, and so all of these things add steps, and add complexity. Well, they don't add steps and complexity - they surface the steps and they surface the complexity that's inherent the process, and you can't help but marvel at how this one box of shoes has been touched by dozens of people in dozens of cities or facilities just to make its way to little ol' me in little ol' Melbourne.

Mel: 15:18 When you think about it, it seems so unnecessary, but we just accept that, "Oh, it's getting tracked, there are people along the way doing things, it's getting to me, it's being worked on." I'll accept it. I'll wait.

Dan: 15:24 Yeah, all that effort is making this a more valuable process.

Mel: 15:27 That's right.

Dan: 15:28 So I think for brands, the goal is to show people what is happening and celebrate it, and surface it, and make sure people understand all of the effort that's going in knowing that they can't help but assign that effort to value.

Mel: 15:41 Cool.

Dan: 15:42 What about peeps?

Mel: 15:43 Well, for just the little ol' people in the picture, one of the key things for this is to understand that people are going to judge your value based on the effort, and not necessarily based on the actual effort, but based on the perceived effort. So, it's really important that you make it look like you put effort into whatever it is that you're doing, which can't be overstated.

Dan: 16:03 Wear a clean t-shirt, right?

Mel: 16:07 Right. I'm going to touch on something that some people might think is a little pedantic, but we're going to talk about spelling mistakes. Spelling mistakes, and even grammatical mistakes, is a sure fire way to let people know that you haven't put in effort, and people say, "Oh, it's just a spelling mistake, it's just a typo." It's not, because people are actually judging your worth and your value based on your spelling mistakes. So, if you're writing something, if you're writing an email to somebody, perhaps to a client, and you're trying to get on good terms with them, and you want them to think that you can produce really high value work, the absolute worse thing you can do is put a spelling mistake in there.

Mel: 16:45 Because they are going to see that, and it's going to give them a very quick indication that you haven't proof read it, that you haven't put enough effort into it. They might even know that you can spell. So, it's not even about whether or not you can spell, but it gives a very quick indication that effort just hasn't been put in, and that means that maybe you're not very good at what you do.

Dan: 17:06 Yeah you lose count of how many times you see comment threads on the web. Somebody writing, really like a brilliant piece of prose that's rebutting an argument of something that somebody else has put forward, and the whole thing is incredible and intelligent and compelling, but they've used the wrong "your."

Mel: 17:24 Your and you're.

Mel: 17:26 Or there, their, and they're?

Dan: 17:27 Yeah, and all of a sudden the whole thing is discredited. Because you've used the wrong "there", and that means you haven't put the effort in, and means this is not valuable.

Mel: 17:35 That's right. So, even if you don't care about spelling, everybody else reading your work does.

Dan: 17:40 Yeah, all right, that's a tough, tough pill to swallow, but thems the breaks.

Mel: 17:46 It's just not that hard, just check your spelling.

Dan: 17:47 Yeah, I mean, you even get little squiggly lines underneath the things.

Mel: 17:49 Exactly. You're going to take me back to my marking days, which we've already touched on once this episode. I'm not interested in going back there.

Dan: 17:55 Yeah, you are starting to shake a little bit.

Mel: 17:57 Yeah, sorry.

Dan: 17:59 All right, probably a good time to wrap up.

Mel: 17:59 Let's wrap up.

Dan: 18:00 All right. So, the effort heuristic.

Mel: 18:07 Is a shortcut that we use when we're trying to estimate the quality of something that we don't really have much else to go on.

Dan: 18:12 Yeah, so you can try and change the world, and bust the paradigm and convince people they should be paying based on value, or you can just lean into it and say, "Yes, you are paying for effort, and look how much we put in."

Mel: 18:20 Yep, and remember, it's the perceived effort. More than even the actual effort.

Dan: 18:25 Awesome. Well, I think that concludes take 192 for this episode.

Mel: 18:29 We really put so much into this, guys.

Dan: 18:31 Yeah, I feel my dad jokes have really lifted over the course of the show as well.

Mel: 18:35 Yeah, well done.

Dan: 18:35 Cool. All right. We're out.

Mel: 18:37 We are out.

Dan: 18:37 We're done. Thanks. See you guys next time.

Mel: 18:39 See ya.