Lecture 1 - SI

What are heuristics?  

• Discission strategies
• Rules of thumb
• Intuitive judgement
• Educated guesses
• Automotive choices

We have a trigger and then a whole sequent that is taking place to get you to make your discission or behavior.  They are highly efficient. Can help us because we have limited cognition. We have limited energy and time to deliberate every choose we have to make. Also they are mostly correct, they give us the right answer. Sometimes it leads to unwanted behavior.

Interesting heuristic:

• Look at people that were in line for a copy machine. The people wanted to go first.
• Control: Excuse me, I have 5 pages, can I use the copy machine? (60% went along)
• Condition: Excuse me, I have 5 pages, can I use the copy machine? Because I’m in a hurry (94% went along) (the reason you’re giving is giving more information)
• 2^nd condition: Excuse me, I have 5 pages, can I use the copy machine? Because I have to make some copies. (93% went along) (the reason you’re providing does not give you any more information) It’s the because that is triggering the script.
• Again control: Excuse me, I have 20 pages, can I use the copy machine?
• Condition: Excuse me, I have 20 pages, can I use the copy machine? Because I have to make some copies. (go along in same rate as no-reason condition/ control group)
• 2^nd condition: Excuse me, I have 20 pages, can I use the copy machine? Because I’m in a hurry

How raising the price can actually increase sales

When you see two products you probably assume that the one with the highest price is better. We often use price as a heuristic to determine the quality of a product. It will also influence your taste. Image a gathering with friends and you buy an 11eu bottle of wine. You really can taste that it tastes nice. Experiment with beer: people drank the same beer, only the price was different. People tend to think the more expensive beer was tastier. When a product is free, people will rate it as less valuable. Complimentary goods (free bracelet when having subscription journal).

‘How much are you willing to pay for this bracelet?‘ People that have the information that the bracelet is a complimentary good are willing to pay 35% less.

Discounts are effective. People will still rate the product as highly valuable. Even when there are no real savings, makes that people are more willing to buy that specific product.

Why and how to ‘play hard to get’

Money that come easily is different spent than money you worked hard for. If it is hard labored you spent it on rational things such as groceries. Easy money you spent on easy things like toy cars. Effort is often used as heuristic to indicate how vulnerable something is.

For your relationship: when somebody plays hard to get you are looking back at all the effort you put in. Assuming you like this person very much, because I did all those things for them. It is in hindsight. If it is in foresight: looking at what effort you have to put in. Thinking about 12 nice things about your boyfriend/girlfriend is really hard. The effort that is involved in getting to these 12 things is; maybe I don’t like this person this much.

Effort is also an effective effect when you have to think about arguments. If it is hard to follow an argument it is less likely to be seen as true. Think about rhyme; this works because it is easy to progress.

If your handwriting is very slopy that automatically the argument that you write down less persuasive. The same is true for how you build up your sentence. People take the effort that is put in the progress of the argument as an indicator of quality.

Simulation, recognition and similarity as weapon of influence

Familiar heuristic: many people, when giving them two options, rate the option that is familiar to them as higher than the other option. Something that we recognize is often chosen.

Similarity heuristic: when making judgement we often compare the current situation to other situations. When we have negative experiences, we try to stay away from experiences that looks like the other one. The same is hold for positive experiences.

Simulation heuristic: the way we can imagine something. Risk analyses. The risk of dying in a plane crash and the rate of dying of an overripe avocado. If you have to choose you obviously choose for the plane crash because you see this in movies and therefore are more known.

Imagine: you must take the train and you are in a hurry. You see that the train is long gone / you see that the train is just leaving. You feel more regret in option B, because you can imagine that if some little thing went faster, you could have catch the train.

The product made to influence you

When we make judgements, we often use referent points. What we use as referent point will influence our judgement. When we use a smurf you will see Kees as a giant person. But when you use a basketball player you will see Kes

es as a little person.

Price: if you first offer a product for a high price, and then offer additional good as less expensive. The price seems even lower. E.g. when selling a car they sell you the car for high money. Then you get accessories such as leather things.

Contrast principle: first make sell for expensive product and then come up with additional aspects.

Real estate agents: first let you see an expensive house that is not nice. The next house that are shown look automatically nicer and you buy them faster.

Adding alternatives

When comparing to referent points some options looks nice and some won’t. Lets assume you want to save money in the bank. There are two options you can chose.

A: 3,2% savings over 5years

B: 3,4% savings over 10years

There are only a few people who chose option B. The bank want to increase this by adding another option.

C: 3,45% savings over 15years

Now option B looks really good, and more people will choose this.

Compromise

First date in a restaurant. You have a great meal and want a nice wine to accompany this. On the menu:

no 1: very expensive.

Middle option: less expensive.

Last 1: carton box wine

Most likely people will go to the middle one. They like the affordable option, but having the middle one you compromise. You expect a little more, but you also pay a little more.