The irrational art of human decision
From the two of my recent readings, Nudge and Predictably Irrational, I found there is one starter concept backed up the whole books: the irrationality of human beings. We need to first admit and acknowledge this concept before we move on. Here I will be talking about Predictably Irrational, written by a Psychology Professor Dan Ariely. This book has 15 chapters about 15 different irrational behaviours when people make decisions. After reading this book, I have better understanding about how people’s mind works when they face some daily incidents such as getting free ice cream, interacting with friends or colleagues, or seeing
Humans are Irrational
So, first of all, here is the most important key point: humans are not rational. In terms of decision making, people used to hypothesize the decision process based on a perfectly rational mind, which is based on the Economic perspective. However, the truth is, people don’t react rationally toward the world, so here comes the Behaviourial Science, which aims to observe and analyze human behaviours based on experiments or real incidents.
The Dichotomy of Norms
According to the author Dan Ariely, we live by two worlds unknowingly. The first one is where market norms dominate, and the second one is where the social norms influence our behaviours. The rule of thumb is, we should avoid confusing the two norms, otherwise our life will be pretty difficult.
For example, if I am invited to a friend’s for a gathering (let’s say we keep a certain distance at the dinning table, just to stay safe during Covid-19). At the end of the gathering, if I go up to the host and offer to pay him for the wonderful cook and venue, I will probably not get the invitation for the future gathering. Why? Because in such a social gathering, people follow the rule of social norms, where everything is measured by emotions, feelings and meanings, instead of money. On the other hand, in the world of market norms, we don’t expect fuzzy human relationships here. Instead, we value numbers, precisions, costs, exchanges and paybacks.
As a result, it’s better if we recognize the dominant world in an occasion to apply the appropriate norms to avoid unpleasant consequences.
Design Implication
When we are designing product or service for users, it’s best if we can keep the two worlds in harmony. To establish relationship with users, we can be careful not to introduce the market value to a warm a fuzzy situation where users are having a wonderful time of building relationship with the product. My guess is, when we want to introduce the market norm in the midst of relationship building, we need to be extra careful.
The Power of Free
Free is a trigger for the fear of missing out.
Free is a button. When people see it, an alarm inside goes off: the loss-aversion alarm. Free makes people don’t want to miss out the potentially good opportunity. Think about the free ice cream we grabbed last time from a sample booth at Costco, although we don’t like the flavor. When we know the lemon pie free, we might choose the free lemony dessert over our favourite chocolate cake. It makes us settle and hesitant, or even change our decisions.
Free also makes people more aware of social norms.
Have you ever experienced walking pass a booth with free cookies? You probably went up and take perhaps one or two pieces. Will you take, say, 10 pieces or even more? What if it’s priced at $1? Will that be as attractive a free cookie? And if so, are you giving a second thought about the amount you can purchase?
According to experiments, in the face of free cookies, people are more likely to approach the booth than a non-free booth, while each person takes less cookies than when the cookie comes with a price. Here is the rationale behind: when it’s free, the market value is diminished out of the context, so it has become a socially-normed world, where feelings and human emotions are prevalent. As a result, people become conscious of the shared benefits of “I take more, then others have less.” On the other hand, when we charge the cookie, we are actually introducing the other world which is governed by market norms. In that world, people might just speak the language of numbers — how much do I need? and how much is it? People seldom think about others in terms of purchasing cookies because “I get what I paid” is the rule of thumb here.
Design Implication
When thinking about design, it’s also good to keep in mind that free is extremely attractive to users. Think about examples of free trial or free shipping. This bright and alluring Free can turn on the emotional trigger and skew people toward the irrational side of decision making. “I can give it a try although I don’t really like TV streaming.” So, lots of people click the free trial button and stay with the service afterward, which also leads us to the next irrational point.
Ownership
Have you ever had the experience that after a period of trying a new product, you have started to think it’s actually not bad and it’s become hard to hit the unsubscribe button to leave it out of your life? Yes, perhaps that Netflix button?
We humans have a thing about ownership and a sense of belonging. So, the possible scenario is that people grew attached about the thing they have spent time and effort on. This kind of ownership somehow makes people convinced that their belongings have higher values than how others view it. Also, this sense of ownership makes people difficult to give up what they have already had. This tendency of loss aversion make it easy for us to hang on what we possess and hard to let it go.
Design Implication
In terms of design, the sense of ownership actually make people hard to give up that subscription or use other apps. Continuing the Netflix example. After 30 days of free trial, the majority of people start to view Netflix as a part of their possession and cannot help but think of the convenience it brings to their life. Knowing this tendency of human, I think it’s imperative that we designers put this into good use. For business purpose, it’s important that we reach as many users as possible, but we definitely need to give them fair choices if they want to stop using the service.
Fight Procrastination
Giving up on long-term goals for immediate satisfaction is a procrastination. — Dan Ariely
Long stories short, we all procrastinate. From the exercise plan to the email that should be replied. It’s good to keep it in mind that we have double states: the cool states and the hot states according to Ariely’s explanation. When we are making goals, we are in this cool and rational state. However, when we are facing distractions or temptations, we are in a hot state, in which we tend to forget how eager we would have wanted for this goal, temporarily.
Knowing this switch of state, we can now make plans (yup, when in this cool clear head) to tackle the urge to procrastinate. It’s about knowing myself and think of plans to avoid the procrastination trap. It’s about get us pre-committed to our plan and face our weakness.
Those who recognize and admit their weakness are in a better position to utilize available tools for precommitment and by doing so, help themselves overcome it. — Dan Ariely
Design Implication
In terms of procrastination, I want to be on the side of encouraging users to achieve their goals without being influenced by procrastination. So, I would love to nudge users to set goals and help them beat procrastination by setting precommitment such as various deadlines through design.
Dishonesty
Honesty has such a vague realm of application and activation. So, according to the study, honest people can behave in deception when the right trigger is turned on. Especially, I want to talk about money. According to the book and Mr. Ariely’s experiments, people are more likely to show honesty in front of real physical money, while in terms of items, people have the tendency to become more treacherous. For example, when there are some cans of beer in the office fridge, people may feel “alright” to take it even though they don’t know whose beer it is (and they know it’s certainly not offered by the company). What if it’s a stash of money on the desk beside the fridge? People’s morality is more awaken in the face of cash.
Design Implication
With that in mind, we can draw the implication to digital payment. We can make a bold assumption that with mobile wallet and credit card, people have been transacting with digital money in an increasing amount of time, which may greatly increase the risk of fraudulent actions.
Some good questions the author has inspired me to ponder upon include: how can we use design to decrease the opportunity of fraud when people’s honesty is in great temptation when they cannot see cash? How can we raise the awareness of through design to nudge people to be more preventive?
Afterthought
Yes, we are irrational. Now we know it, and then?
In general, by knowing these tendencies of humans and why we behave the way we do, everyone, not only designers, can become more conscious when making decisions. We can try to step back out of our subjective bubble to think about how to make a better decision each time. Knowing is just the beginning and the real battle field is in our every day life. Are you ready?
