How better to end the year than with a Christmas acronym to explain much of the irrational behaviour the festive season invites?
C is for Choice Overload, that brain-emptying feeling you experience when shopping for gifts because you are overwhelmed with choices.
H is for Hedonic Framing, the fact that two separate gains are more valuable than one large gain of equal value. That means lots of small gifts will be better received than one big one.
R is for Restraint Bias, our tendency to overestimate our ability to show restraint in the face of temptation. Chocolate, booze, prawns…you get the idea.
I is for Impact Bias, also known as the Affective Forecasting Error which sees us overestimate how happy or sad we will feel in the future about a gain or loss. In other words, that new toy will not really make your life complete.
S is for Social Norms, where we do what others do, which explains why whole streets of houses buckle under the pressure to hang festive lights like the Griswold’s.
T is for Temptation Bundling, where grouping a ‘want to do’ priority with a ‘should do’ priority makes us more likely to do both. This could include bundling ‘alcohol’ with ‘spending time with family’.
M is for Mental Accounting, our tendency to think of the world in terms of specific accounts where the value of one account is different to other. Typically that means we think we’ve spent more on gifts for others than they have on us!
A is for Anchoring, where the perceived value of an item is influenced by an earlier reference point. When giving gifts, you want your recipient to be anchored low so they think you’ve spent a fortune. When buying seafood, try not to remember how much prawns cost usually because that will just hurt too much.
S is for Scarcity, our tendency to value something more if it is rare – like car spaces at the shopping centre on Christmas Eve. Parents of young kids also know about scarcity when they find themselves traipsing all over the city to find the last Fingerling or Hatchimal in the country, willingly re-mortgaging the house to secure one.
Thanks for reading about behavioural science with me this year, and I look forward to sharing more in 2018. Stay safe and have a great C.H.R.I.S.T.M.A.S.