← The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics
422. The Lazy Brain: Unveiling Biases That Shape Our Decisions (Refreshed Episode)
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In this episode of The Brainy Business podcast, Melina Palmer explores the fascinating world of lazy brain biases. This episode is part of an eight-part series exploring various biases, focusing on how our brains prefer to take the path of least...
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Have you ever wished you had more influence at work? That people would naturally be more likely to buy in on whatever idea you're selling them, whether they report to you or not? Well, you're in luck. I teach a virtual 10 week class on Internal Communication and Change Management through Texas A and M University and it's enrolling now. Get details and enroll at HBL Tamu Edu and click on Certificate Program. You get to learn directly from me, including live virtual office hours over zoom with a cohort of interested brainy folks like you from around the world. Again, learn more and enroll in the internal communication and change management course at HBL Tamu.
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Edu.
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That's HBL like Human Behavior Lab, Dot TAMU like Texas A and M University and click on Certificate Program. Your future self will thank you and when you're ready, enjoy the show. Welcome to episode 422 of the Brainy Business Understanding the Psychology of why People Buy Today's episode is all about lazy brain biases.
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Ready? Let's get started.
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You are listening to the Brainy Business Podcast where we dig into the psychology of why people Buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now here's your host, Melina Palmer.
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Hello. Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. Today's episode is from the eight part series I did on all the Biases. This one was about all the ways our brains like to beat be lazy and it includes some of my very favorite biases which is always fun. Let me know if you can spot them with a tag on social media. I'm the Brainy Biz pretty much everywhere and Melina Palmer on LinkedIn in case.
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This is your first one of these.
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All the Biases episodes, the setup on these is a little different than what we do most of the time here on the show. This episode is essentially a rapid fire list of all the biases that fall into this category. There's not too much detail on anything, just enough so you know a little about each and can start to understand what they do, how they work together, how they're overlapping and maybe even sometimes competing just to kind of get a good grasp on the complexity of our brains a little bit. Several of the concepts mentioned throughout the episode do already have their own dedicated episodes on the show. As I said, they're some of my.
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Favorites, so there are links for those.
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In the show notes if you want to learn more. The reason I chose to refresh this one today is because of my interview this upcoming Friday with Alex Edmonds about his book May Contain Lies. While the book is about misinformation in many ways, it's mostly about understanding information responsibly, both in how you share it and how you process it yourself. Lazy brains are a big reason that we take information at face value. But but information isn't always as it seems. As you'll hear from Alex on Friday, a statement is not fact. A fact is not data. Data is not evidence, and evidence is not proof.
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So what is real and what is a lie?
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Tune in Friday to find out. If you aren't already subscribed to the Brainy Business podcast, now's a great time to do so. There is, of course, a link in the Show Notes to make it easy, along with links to my top related past episodes and books and and more. It's all waiting for you in the Show Notes for this episode, which are found within the app you're listening to and at the brainy business.com 4:2 2 All right, let's talk about lazy brain biases.
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I think it's particularly fitting that we've gone into detail on a few of these already, so today's episode will potentially be the shortest one on the podcast to date, with this being the lazy brain episode and all. Nah, I like the cohesiveness. So the first concept is the default effect, which was covered in episode 20 and again in episode 38 as part of the series on Nudges. We humans are most likely to choose a default option when we're provided one, whether it's in our best interest or not. Our brains like the path of least resistance and are likely to assume something is being presented as the default for a reason. Unless we have our own reason to buck the system, we generally don't. What's really interesting is that our choices are pretty easy to change, and this has been shown in all sorts of studies due to the decoy effect, which I talked about in episode 12 on relativity and in the same series on Nudges that I already mentioned mentioned, someone's preference for a choice or a product will change based on the options that are presented to them at any given time. If you've heard me speak in person or on a webinar, you may have heard me talk about selling an espresso machine in a small appliance store. If you have one that you put on the shelf listed for $150 and no one buys it, and then you decide to add a second espresso machine, that's double the size and twice the so now the original model starts to fly off the shelves. In that episode I also talked about how an old ad for the Economist had three different options to choose from. They had digital only for $59, print only for 125 and a bundle of print plus digital for the same $125. In this version, 16 people chose digital only. No one got the ridiculous print only version and 84 the bundle. What happens when you remove the erroneous print only option that no one wants? The masses flock to the digital only option. It goes up to 68 choosing it and brings the bundle down from 84 to 32. It's a huge shift from removing an option that no one chose. And remember, your espresso machine didn't change in the first example. The price remained the same, everything was the same. You should just put a different thing next to it and it made a difference in the choices that people made. The print only version is a decoy and so is that bigger espresso machine and it shows the value of the bundle. This works both because our brains are lazy and because we don't like to do math in our heads. For more on these concepts, listen to episodes 11 and 12. There are links to them in the show Notes along with a link to the book Predictably Irrational by Dan Ariely where that Economist study was profiled. Much like the Google Effect which I talked about in the episode On Memory, we have an automation bias which leads us to have an excessive dependence on automated systems. Think about how much you might be dependent on your calendar, on your phone. This can create a situation where those automated decisions override the choices of individuals that would or could be more correct and accurate. In the world of machine learning and more and more automated processes, we're all really built to assume the system is best and is all knowing. But there are lots of things automation can't do properly, so it's important to be thoughtful and take a look under the hood every now and then. Be proactive to make sure your automations are still doing what they should and look for ways to improve them. See if you still need them. Add more Whatever it is, just take the time to check and don't blindly rely on what they're doing and assume that it's the best option. Similar to that is the law of the instrument where we are overly reliant on a tool that we're particularly familiar with. The old adage to explain this is if all you have is a hammer, everything looks like a nail. And to build on that, we also get hung up by functional fixedness, which is where someone is limited to using an object only in the way it's traditionally designed or expected to be used. On many occasions, it's worth using tools in the way they were intended and to look for nails when you have a hammer. But in many other cases, our businesses would be best served if we could look at a problem in a new way, from a new angle and find a new approach. This is why innovation exercises are helpful and why I love working with clients on expanding their skills in this area. One great example of this is the Apollo 13 mission. You likely know the story, three astronauts in peril and the miraculous team effort that got them home safely. There were multiple things that could have killed them in this event, including the systems that were meant to scrub the CO2 from the air to keep it breathable. The system that was designed for one area of the craft had square fittings and the other had round ones. So the team literally needed to find a way to make a square peg fit into a round hole with only the items on the craft. If the team on the ground was only looking at the hammers they had and tried to make everything into a nail, it would have been a very different story, but they were able to think differently and overcome their brain's biases. You may not realize this, but did you know we are less than a month away from the 50 year anniversary of the first moon landing. It's pretty amazing when you think of it, and so inspirational to see how the teams came together to bring three astronauts home on Apollo 13 nearly 50 years ago. The anniversary of that's a little bit later, not Until April of 2020, it's 50 year anniversary. But remember everything they were able to do through the NASA projects of getting humans to land and walk on the moon were really innovative and amazing experiences of looking at the world in a different way. Those two biases, the law of the instrument and functional fixedness make our brains more likely to be influenced by framing and anchoring, which can also be called focalism because our brains are looking for the easiest answer and solution. Most of the time the the way the information is presented or the frame can determine what actions we take. Episode 16 on framing is Linked in the Show Notes Anchoring is a type of framing where you frame the message to include a number or a specific piece of information which the brain relies on too heavily when making a choice. This is usually the first piece of information that is provided on a certain subject and the initial anchor can be hard to break free from people's minds. That's why when I talk about anchoring and pricing, I almost always recommend starting with the highest price first to set the high anchor and make the other prices seem lower in comparison. This is combined with relativity and the decoy effect to help influence choice. The contrast effect makes it so different stimuli are viewed differently based on what was seen just before it I talk about this a lot in the episode on priming. Remember how holding an iced coffee or a hot coffee for just a few seconds before even entering the building for a research project made it so? The participants rated the personalities of the people they were reading about differently. Those who held the iced coffee were more likely to rate the person they read about as cold and difficult than those who held the hot coffee. To use this in your business, think about what's going on before people interact with your brand. What commercial or show is on before your advertisement? What conversations are people having right before they speak with you? What page do they see on your website before they're presented with pricing information? What did you say to them right before you talked about pricing? If they're on the phone or in person, this all impacts the decisions they make. Because of how easily our brains are influenced by priming and previously presented information, we also have interoceptive bias, which is when we believe that the inputs we're receiving from our senses are actually reflective of what's going on outside of our bodies and can influence our external decisions. You may have heard that judges are more likely to provide harsh sentences right before lunches and breaks, and they're more lenient when they're well fed and rested. This is because their senses influence the way they're perceiving the world. They feel more grumpy because they're hungry and essentially relate it to the person or or issue they're making a decision about and don't realize that it's about something completely different than the person that's standing in front of them. Here's a question. Do you take enough breaks when you're working? Would you be sentencing someone to a harsher sentence than they deserved? Are you taking a break before you make really big, important decisions? You should have snacks. Take breaks. It's important. Last week I talked about the ambiguity effect that we avoid options and choices where we don't know the odds or likelihood of the outcome in advance, and we would rather choose an option with bad odds that we know right now than go down that unknown path. This can also be seen in the action bias, which is when we take an action simply to feel like we're in control of something, we want to make a choice, any choice, even if it makes us worse off or doesn't have a positive impact. Someone diagnosed with a serious illness may opt for a treatment over waiting and seeing, even though the treatment is not showing to be effective in trials, just to feel like they're doing something. If you're familiar with soccer or football, for the international listeners I know I have what do goalies typically do when there's a penalty kick? They choose a direction to jump, right or left. But what would happen if they simply stayed in the middle of the goal? Statistically, they'd be better off and are more likely to stop the ball. But if they don't move and they don't stop the ball, they're more likely to be judged harshly by fans, their coaches and members of their team. So perhaps due to herding as well as action bias, they jump in the episode on our biases toward others. I talked about stereotyping. One reason this occurs is because our brains are lazy and instead of doing the work to interview and understand the nature of every single person in a group, which would honestly be a big waste of time, we assume everyone is the same as those they're in a group with. For our purposes today, this is called illicit transference, and there are two versions. When you assume things about the group because of one person you've interacted with. It's called the fallacy of composition. This would be like saying because Judy is kind, everyone who shops in this store must be kind. The reverse of that is the fallacy of division, where you determine each individual must be like the whole group. This would be like saying because Enron was a corrupt corporation, everyone who worked there must be corrupt. These are sweeping statements that are not true of everyone. But it's easier for our lazy brains to assume and make decisions that based on those assumptions. And I do want to take just a quick moment to revisit something I said just a second ago in that it would be a total waste of our time to actually interview everyone in a group. And that's where this shows you. And I hope you've seen throughout all these episodes that these biases where sometimes they steer us in the wrong direction or lead us astray, they really are there for us, a reason they have been created over a long period of time to help us become the species that we are today and to create and enjoy our lives in the way that we do. We couldn't take the time to evaluate every single decision, we would never be able to get anything done. So these rules of thumb that our subconscious brains have developed are to help us to be constantly moving forward, to to be making choices, to be testing things out. And often these good enough decisions are truly good enough to move forward. So when I say our brains are lazy, I don't want you to think that that is all negative. There are good things that come from that as well. But it's important to understand some of these rules so you can choose and determine when it makes sense for you to be more focused. It's not always the case that you want to be focused on everything because again, you wouldn't get anything done. But in some cases, like when you're in the workplace, when you're working on a really important project, when you are trying to sell differently to customers, when you're working on being innovative, you need to step outside of those biases. And that's easier to do if you know that they exist. One thing that we tend to do in business which can be really limiting and cause problems is called surrogation. And that's where you substitute a strategic construct or measure and act as though it actually is the thing you're trying to gain insight on. Let me explain. I want you to think about a manager who is asked to increase customer satisfaction. And so they create a survey to measure customer satisfaction. Not too uncommon, right? What can happen is that they start to think that the survey and its results actually are customer satisfaction when they're different things. The measure is not the whole, it's not everything, and it isn't the same as customer satisfaction in and of itself. When we're presented with tasks that are particularly daunting, we may become a victim of Parkinson's law of triviality, which is also known as bike shedding. This is when trivial issues are given way too much weight and we can get stuck on the small stuff to avoid fixing and working on the big stuff. Why do they call this bike shedding? The story goes, if an organization is supposed to be working on a complex and diffic, say, designing a vehicle that doesn't run on gasoline. But instead they allow themselves to focus on a smaller task that's easier for everyone to grasp and find rewarding. Like designing the bike shed next to the building. I work with a lot of clients on pricing, and I get questions on pricing all the time. One thing that people allow themselves to get hung up on is whether their prices should end in a 9, 75 or 0 and I did answer this question for you on episode 17. What I've found over many, many conversations is that people are allowing themselves to spin out on this trivial item to avoid having a deeper strategic conversation about their overall pricing strategy, which is more difficult. You may worry that pulling at that thread will unravel your entire sweater, but in reality it doesn't have to be that hard. If you've not yet listened to the Truth about pricing, I recommend you check it out and there is a link for you in the show notes. And of course, if you're interested in hiring someone to help you get over your bike shedding bias and feel confident in your pricing, I would love to work with you. Simply visit thebrainybusiness.com and click on Work with Me to schedule your free discovery call. If you remember from the episode on Memory I talked about the lag effect, how we learn better if our studying is spread out over time instead of trying to cram it all in during one session, and how not all methods of putting information into our memory have the same level of effectiveness due to the levels of processing effect. For example, writing helps you remember things better than typing because it's a slower process to write by hand and your brain has to really think about and focus on what you're doing. Lazy brains are easily distracted, so often the way to trick your lazy brain into focusing is making the task a little more difficult, or setting a timer where you have to focus on the particular item in a short burst of time or coming back multiple times to show your brain it's important for you to remember this particular thing. The last thing I want to talk about in this episode on the Lazy Brain is the list length effect. Let's say I gave you a list of 30 items to remember. You may remember half of the items on that list for a total of 15. If I gave you a list of 100 items, you may only remember 40% of them instead of 50% of the shorter list. But it's a much higher number of total items than when you were provided with the shorter list. It's nearly three times as much in this case. What's the lesson to learn from that? Our brains are lazy, but they're only as lazy as we allow them to be. If you only try to remember 30 things, you'll remember less than if you tried to remember 100. If you constantly push your limits, your brain will rise up to that new challenge because it still likes to be right and prove how powerful it is while still being a bit lazy. My advice is to take a limiting belief you have maybe that you can't Write more than 500 words a day and push the limits. Say you want to bump that up to a thousand words. You could set a goal for 2,500 words a day to see if you hit your goal of a thousand or if you want to have something that's a little bit more motivating. Instead of continually not hitting a goal, you could maybe step up your habit a little bit each day. So for the first week you will jump up to 550 words a day, which is just a few more the next week 600 as you stretch your brain's expectation all the way up to a thousand words and probably beyond. The general advice is to not let your lazy brain limit what you do. Everyone has the same amount of time in a day, even those who run multiple global corporations and still find the time to be there for their child's ballet recital between training for their next marathon. Your brain will be as lazy as you allow it to be, so push the limits and see how much you can grow.
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So what got your brain buzzing as you learned about lazy brain biases today? For me, I really like these episodes with a super light touch on a bunch of different biases. They're so different than my natural tendency to really just dig in on one thing and tell you everything about it that might matter. It's good practice for me to be quicker and I think it makes for a fun experience for you, the listener, to have right? In the episodes I've toyed around with doing more short form content. I'm not sure if that would be short little Brainy Bites episode in audio only format or reels, YouTube shorts or even just short videos. What do you think?
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Would you like that?
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Would they be something you think your lazy brain would enjoy? Let me know. On social media you'll find me as the Brainy Biz pretty much everywhere and as Melina Palmer on LinkedIn. You can also send an email to melinathebrainybusiness.com to let us know what you think and to make it easy. There are links in the show notes along with links to related past episodes and books and more. It's all waiting for you in the app you're listening to and at the brainy business.com 422 and just like that, episode 422 on lazy brain biases is done. Join me Friday for a brand new episode with Alex Edmonds discussing his book May Contain Lies. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me, and remember to be thoughtful.
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Thank you for listening to the Brainy Business Podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness. Com.