Heuristics and Perceptions — Hooked Series : Part 1
Understanding of how human behavior can help make habit-forming products.
Gulping down my coffee this morning and pensively looking back at the timeline of this year I was trying to demystify the sine curve pattern which we often come across in our lives. On one hand where 2020 might be remembered for all the unwanted reasons, on the contrary, it has definitely surprised me within the legends of space and time to learn more about myself and set the tone right for the behaviors I can build to keep some amazing habits very much in check.
As I’m ‘Hooked’ this week to this great read from Nir Eyal on How to Build Habit-Forming products. Let me walk you through some interesting insights on what I learnt more about human behavior — which according to Dr B.J. Fogg behavior model is driven by motivation, ability and a trigger present at the same time. This write-up is my attempt to pause, reflect and reinforce what I have read and capture you along to make this learning journey even more interesting.
Let’s go back to our Economics 101 class where we all learnt that as prices decrease, consumers purchase more - in Fogg’s term, an example of increasing ability by decreasing price. However, although the principle seems elementary, the law, like many other theories of human behavior, has exceptions. Noble Prize winner Daniel Kahneman, in the field of behavioral economics, exposed exceptions to the rational model of human behavior. Even the notion that people always consume more if something costs less is a tendency, not an absolute.
There are many counterintuitive and surprising ways companies can boost user’s motivation and increase their ability by understanding heuristics. — the mental shortcuts we take to make decisions and form opinions.
Users are generally unaware of these influences on their behavior while going about their purchase, but heuristics can help predict their actions. As Nir Eyal explains further, let’s dive into one of the key brain biases in particular.
- The Scarcity Effect
In 1975 researchers Stephen Worchel, Jerry Lee, and Akanbi Adewole tried to figure out on how people would value cookies in two identical glass jars. One jar held ten cookies while the other contained just two. Which one do you think people value more ?
Well, to your surprise participants valued the one in the near-empty jar more highly.
The appearance of scarcity affected their perception of value.
If there are fewer of an item, the thinking goes, it might be because other people know something you don’t — precisely, that the cookies in the almost-empty jar are the better choice. This conveyed information by the jar with just two cookies though is very much irrelevant as the cookies are identical in reality. Still, the perception of scarcity changed their perceived value.
Now to gather more insights on this bias, the researchers tried to analyze on what would happen to the perception of the value of cookies if they suddenly become scarce or abundant. The people in the group with ten cookies suddenly had eight taken away. Conversely, those with only two cookies had eight new ones added to their jars. And, boom, what do you think happened this time to the perceived value of the cookies?
Well, the results remained consistent with the scarcity heuristic. The group with just two cookies found them to be more valuable, whole those experiencing sudden abundance by going from two to ten actually values the cookies less. In-fact they valued the cookies even lower than people who started with ten cookies to begin with. The study showed that a product can decrease in perceived value if it starts off as scarce and becomes abundant.
Let’s talk about a real life buying scenario at Amazon.com —
“Only 2 left in stock” does that ring a bell ? Is the world largest online retailer almost sold out of nearly everything I want to buy, you might feel — ah, well it’s 2020 you never know, or are they thoughtful about using the scarcity heuristic to influence my buying behavior ? 🤔
Please feel free to share the examples leading to a certain buying characteristic or behavior you come across in your day to day lives, and in the meantime I’ll be writing to share some more insights about perceptions and heuristics from this amazing read on my upcoming article in this series.
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