PsyBlog identifies some of the cognitive biases that predispose us to shop, consume, purchase and buy – with implications for both those that want to do less buying of their own, and for those that want to persuade others to buy more.
Why do we consume, shop, buy or purchase? The answer to this question of course bears implications for at least two sides: those who want to spend less can control it through an understanding of what drives them to do it, while those that want to do persuade others to do more of it can benefit from the same understanding. To that end, we found a post at PsyBlog on’10 cognitive biases that drive us to buy interesting. For the sake of brevity, we’ve summarized these cognitive predispositions below. You can decide whether to use them to convince yourself not to buy – or to persuade others to purchase.
Status Quo Bias: We stick to what we know – even though there are better options.
Post-Purchase Rationalization: Once we’ve made a decision, we convince ourselves it was the right one – and may attribute more value to it than it deserves.
The Relativity Trap: Price is always relative to what it’s compared to; restaurants, electronics & apparel retailers in particular realize this when they structure and organize their menu or portfolio of related offerings. Because a $400 pair of shoes may feel like a ‘bargain’ when up against a $1,000 pair, impartial price comparison sites are recommended. Also, compare across categories – what else could the $400 get you in terms of travel, dining out, or charity?
Ownership Effect: We value things more when we own them. This effect is visible when we bid on eBay, and feel attachment even before we actually buy an item, sometimes ultimately bidding above market value. So what’s one to do? Set limits (researched limits) – and stick to them.
Present Bias: Human nature prefers our pleasures now and our pains for later. So we’ll easily buy if they offer us 20% off now, or buy now & pay later. Not always wise if you think of how you’ll feel about that purchase 3 days, or 3 weeks from now. Smart, or regretful?
Fear of Loss: Even when something is losing value, we oftentimes don’t want to give it up before we lose further. Like a motorcycle or real estate – if it’s costing more to keep than to sell, you may be better off with the short-term loss.
Familiarity Bias: Much like the status quo bias (we’re not sure we understand the difference), we oftentimes buy what we’re comfortable with and feel we know – even if newer entrants can often a better (but less known) solution.
Rosy Retrospection: We have a tendency to make our past decisions feel better than what they actually were. Question your past decisions – there may be a better way to go about (and purchase) things.
Free: Are you exchanging something in return for that ‘free’ item? If you’re paying in order to tap into that ‘free’ offer, it’s definitely costlier than the promotional offer would imply.
Restraint Bias: We’re simply not wired to excel at restraint. We tend to go overboard on the good stuff. Recognize this; so if you have to cut yourself off – do.