Introduction

On average, humans are not "rational". More precisely, humans are not always capable of making rational decisions. Not because we are stupid, but simply because it is not always practical or possible to do so. In these cases, we tend to use heuristics in order to make a decision, which works in many situations.

This post serves as a basis of how humans make decisions and the way to influence how other people make decisions.

 

Heuristics and Biases

What is a heuristic?

A heuristic is any approach to problem solving, learning or discovery that employs a practical method. Rather than being optimal, perfect, logical or rational, a heuristic tries to be sufficient for reaching an immediate goal.

Why do we use heuristics?

When you come across a decision problem, you might not be able to come up with an optimal solution, because it is impractical or impossible to do so. In these situations, our brain automatically use heuristics. Simply because it is efficient and they work fine in most situations and it is not feasible to come up with a satisfying solution using just logic.

The problem with using heuristics

There are situations where heuristics don't work as well as you would expect. These systematic errors produced by heuristics are called biases. Individuals use their perception of the input to create their own subjective social reality and use this reality rather than the objective reality to make decisions or solve problems. This may lead to perceptual distortion, inaccurate judgement and illogical interpretation or what is broadly called irrationality.

Biases do not only arise from heuristics, but also from social influence, emotional or moral reasoning and others.

 

Scarcity Heuristic

Description

Scarcity in the area of social psychology works much like scarcity in the area of economics. People place a higher value on something that is scarce and a lower value on something in abundance. A very common example is men who are needy. Men who are always needy tend to have a low SMV, simply because their presence is in abundance.

The scarcity heuristic is a value estimation heuristic that places a value on something based on the fact how easily it might be lost, especially to competitors. This heuristic is based on the idea that the more difficult it is to acquire something, the higher the value that it has.

 

Enhancement of the Scarcity effect

Two psychology principles exist that are able to increase the scarcity effect:

 

• Social proof For example, if something is scarce and the demand for it is high, humans have the tendency to interpret that it must have a high value, since everyone else wants it as well. A well known example can be found on web shops with the common phrase 'x items left!'

   

  This is one of the reasons why things like lifting and looking good works. The SMV of a person is not determined by your own perception, but by the perception of everybody else (social proof).

   

  Relevant field report: Going To An Event Where You Don’t Know Anyone

 

• Commitment and consistency For example, if somebody has committed themselves to something, but suddenly find out that cannot have it anymore, it makes the person want it more.

   

  One of the popular strategies based from this fact is dread. Be aware that this will only work if the person has already committed to you.

   

  Relevant field report: Dread works. First experience with this beauty.

 

Note that the social proof principle is also able to work against something. If the demand is low, people tend to assume that the value must be low, since no one wants it. The scarcity effect will not help in this case.

 

Loss aversion

Description

Loss aversion is a bias that refers to people's tendency to prefer avoiding losses rather than acquiring equivalent gains. Loss aversion is commonly described as an irrational way of making decisions. A simple example describing this phenomenon is the fact that people feel better when they avoid losing $10 rather than gaining $10.

A visualization of this behavior can be seen in this graph. As seen, the curvatures of the gains is concave, while the curvatures of the losses is convex.

 

Usage

Keep in mind that for your partner a loss is preferred to be avoided rather than acquiring a gain. This is also one of the reasons that makes dread work. These situations can exist whenever your partner is doing something that you strongly disagree with (e.g. talking to another attractive guy). Using dread in these situations gives your partner the following choice:

• Getting her way (gain)
• Getting your way (avoiding loss)

Relevant field report: TRP success: Drunk GF gets dread game.

Just make sure not to overuse dread, as this will desensitize the loss feeling when applied.