Viewing entries tagged Psychology
A few months ago I posted that we researched 18 factors in deciding which movie to see and where to see it. We reported that “It’s in 3D” was at the bottom of the list, and concluded that 3-D was unlikely to save the American movie box office.
What made the top of the list was “I like the plot or story,” followed by “It is in my favorite movie genre” and “It has my favorite stars.”
But surely the plot isn’t the critical decision-maker for every movie-goer; there must be groups of viewers whose decisions revolve around some of the other items on that list. We took their ratings and ran a segmentation analysis. While this type of analysis is done on a much grander scale by researchers in the movie industry, we thought it would be interesting to do some analysis of our own.
Tags: Decision-making, Psychology
We had a notion here at TRC that by the middle of March most New Year’s Resolutions would have been tossed by the wayside, either in favor of giving up something meaningful for Lent, or the simple acknowledgement that this just isn’t the year to lose 25 pounds. Would folks who made a resolution at the beginning of the year still be keeping that resolution 3 months later?
We kicked around a few hypotheses, and then went about testing them using our online panel of consumers:
- Younger consumers would be more likely to make resolutions than older ones (we figured they hadn’t become jaded by their resolutions not working out over time)
- People would be more focused on issues relating to their health (losing weight, exercising more) than other types of resolutions.
- Most folks who made a resolution would have dropped it by the 3-month mark
So how did our predictions fare?
Tags: Psychology, Consumer Behavior
The Outside View that Daniel Kahneman talks about in his book Thinking, Fast & Slow, is a specific remedy to a problem known as the planning fallacy (i.e.) the inability of people to make predictions. The planning fallacy is part of a larger problem of optimism bias. What is optimism bias? Simply put, people are generally more optimistic than they should be. For example, it is well known that most people think they are better than average drivers, an impossibility. It stems from a general dose of overconfidence not warranted by the situation on hand.
The best example of overconfidence is a study that Kahneman cites of CFOs of large corporations. They were asked to estimate the returns of the S&P Index over the following year. The data were collected over a number of years and hence there was ample opportunity to correlate it with the actual performance of the Index in the following year. Any guesses as to this correlation, given that the respondents should have been expected to have special insight in this matter? It was almost exactly zero, slightly less, in fact! And they seemed to have no idea their forecast was that bad.
Tags: Psychology
In his opus Thinking, Fast & Slow, Nobel winner Daniel Kahneman (click here for previous post) relates a story from early in his career when he was leading a team to develop a curriculum and write a textbook on judgment and decision-making in high schools. He had assembled a group of experts and after working diligently for a year they had completed an outline of the syllabus and written two chapters. One fine day when discussing procedures for estimating uncertain quantities, it occurred to him that he should get an estimate from everyone on how long he thought this whole project would take. Being the clever psychologist that he was, rather than ask the group to guess publicly, he asked each person to make a confidential prediction. The mean was about two years and the range was about half a year on either side. In other words, the group was very consistent in its prediction.
Tags: Psychology, Daniel Kahneman, Behavioral Economics, Market Research, Consumer Behavior
The Nobel Prize winner and the intellectual godfather of behavioral economics, Daniel Kahneman, has summarized a lifetime of research in his recent book Thinking, Fast & Slow. In the next few blog posts I will be drawing upon some concepts that he espouses and link them up to research to see what practitioners can take away from his four decades of work.
This post goes directly to the title of the work; fast and slow thinking. This is the foundation of his work. He and his great collaborator Amos Tversky, (who passed away and therefore could not receive the Nobel) see human thinking in two forms that they call System 1 and System 2. More aptly they could be called “automatic” and “effortful” systems, but Fast and Slow is a good shorthand description. According to Kahneman’s description,
“System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control”
“System 2 allocates attention to the effortful mental activities that demand it, including complex computations”
Tags: Market Research, Consumer Behavior, Psychology, Behavioral Economics
Yes, it is a rather important issue and can be approached in a variety of ways. My purpose with this post is not to provide a comprehensive answer, but look at one specific solution based on what I recently read. The book is Thinking, Fast and Slow, the Nobel Prize winner Daniel Kahneman's excellent summary of a lifetime of research. He is perhaps the most accomplished psychologist around and could (among other things) justifiably be called the intellectual godfather of behavioral economics. It is always worth listening to what he says and in this particular case, it seems to me there is a nugget that applies to making quantitative research more actionable.
Tags: Psychology, Behavioral Economics, Consumer Behavior
It is that time of year when many people's thoughts turn towards buying gifts for loved ones. More generally it is a time when thoughts related to money and happiness occupy our attention. When thinking of ways to spend money either on oneself, for loved ones or even for complete strangers wouldn't it be nice if there was some actual research to provide data-based guidance on the topic? As it happens, there is. Researchers Elizabeth Dunn of the University of British Columbia, Daniel Gilbert of Harvard and Timothy Wilson of the University of Virginia have identified, through their research, eight principles designed to help consumers get more happiness for their money. Follow them as you will to enhance your life.
Tags: Psychology
Let’s pick a topic. Any topic. How much would you say you know on that topic? More than average? How much do you think you need to learn in order to become well-versed on that topic? Not a whole lot? You just may be experiencing what is known as the Dunning-Kruger Effect. It is a mental bias that seems to afflict people who are unskilled or not very knowledgeable. They routinely make poor decisions because their lack of competence itself denies them the ability to realize their lack of competence. It happens to a lot of us in certain areas like personal financial planning.
Tags: Psychology
Several popular books have appeared over the last few years on topics related to consumers, behavior, psychology and economics. Perhaps the most popular are the ones by Malcolm Gladwell. While most use academic research liberally to make their points, relatively few have actually been written by an academic. The reasons are twofold. One, you need an academic who has done sufficient research in an area that is worthy and of interest to the general public and two, you need good writers for lay readers. That combination is hard to come by -- which makes The Art of Choosing an unusual and interesting book. It was written by Sheena Iyengar, a professor at Columbia University Business School and deals with a topic we are all familiar with – choice. She has spent a couple of decades studying this topic and is hence eminently suited to write on it. The fact that she is blind makes it almost awe inspiring to read.
Tags: Consumer Behavior, Psychology
In casual conversation do you use terms like “Up North” and “Down South”? Why? Is north vertically higher than south? Of course not. It is just a common usage of language that we are used to, right? But does it have any consequences for behavior? Research has shown that people often make mistakes in travel related judgment, especially when estimating time and distance. Research has also shown that people associate vertical position with meaning. For example, people are faster to identify the relationship between words like “basement” and “attic” when the word presentation is consistent with their spatial relationship (“attic” above “basement”). Given all that, is it possible that people may consider traveling north to be longer or costlier or more difficult than south bound travel simply because we think of it as being “up”? That is the research question.
Tags: Psychology
