Have you ever bitten your tongue in a meeting? Surely. You sit there, say nothing, and nod along to proposals. After all, you don’t want to be the (eternal) naysayer. Moreover, you might not be 100 percent sure why you disagree, whereas the others are unanimous—and far from stupid. So you keep your mouth shut for another day. When everyone thinks and acts like this, groupthink is at work: This is where a group of smart people makes reckless decisions because everyone aligns their opinions with the supposed consensus. Thus, motions are passed that each individual group member would have rejected if no peer pressure had been involved. Groupthink is a special branch of social proof, a flaw that we discussed in chapter 4.
At 7:15 p.m. on March 1, 1950, the fifteen members of the church choir in Beatrice, Nebraska, were scheduled to meet for rehearsal. For various reasons, they were all running late. The minister’s family was delayed because his wife still had to iron their daughter’s dress. One couple was held back when their car wouldn’t start. The pianist wanted to be there thirty minutes early, but he fell into a deep sleep after dinner. And so on. At 7:25 p.m., the church exploded. The blast was heard all around the village. It blew out the walls and sent the roof crashing to the ground. Miraculously, nobody was killed. The fire chief traced the explosion back to a gas leak, even though members of the choir were convinced they had received a sign from God. Hand of God or coincidence?
The BMW gleamed in the parking lot of the used-car dealership. Although it had a few miles on the odometer, it looked in perfect condition. I (Rolf Dobelli) know a little about used cars, and to me, it was worth around $40,000. However, the salesman was pushing for $50,000 and wouldn’t budge a dime. When he called the next week to say he would accept $40,000 after all, I went for it. The next day, I took it out for a spin and stopped at a gas station. The owner came out to admire the care—and proceeded to offer me $53,000 in cash on the spot. I politely declined. Only on the way home did I realize how ridiculous I was to have said no. Something that I considered worth $40,000 had passed into my possession and suddenly taken on a value of more than $53,000. If I were thinking purely rationally, I would have sold the care immediately. But, alas, I’d fallen under the influence of the endowment effect. We consider things to be more valuable the moment we own them. In other words, if we are selling something, we charge more for it than what we ourselves would be willing to spend.
You Like Me, You Really, Really Like Me: Liking Bias
Kevin has just bought two boxes of fine Margaux. He rarely drinks wine—not even Bordeaux—but the sales assistant was so nice, not fake or pushy, just really likable. So he bought them.
Joe Girard is considered the most successful car salesman in the world. His tip for success: “There’s nothing more effective in selling anything than getting the customer to believe, really believe, that you like him and care about him.” Giard doesn’t just talk the talk: His secret weapon is sending a card to his customers each month. Just one sentence salutes them: “I like you.”
My (Rolf Dobelli) sister and her husband bought an unfinished house a little while ago. Since then, we haven’t been able to talk about anything else. The sole topic of conversation for the past two months has been bathroom tiles: ceramic, granite, marble, metal, stone, wood, glass, and every type of laminate known to man. Rarely have I seen my sister in such anguish. “There are just too many to choose from,” she exclaims, throwing her hands in the air and returning to the tile catalog, her constant companion.
I’ve counted and researched: My local grocery store stocks 48 varieties of yogurt, 134 types of red wine, 64 different cleaning products, and a grand total of 30,000 items. Amazon, the Internet bookseller, has two million titles available. Nowadays, people are bombarded with options, such as hundreds of mental disorders, thousands of different careers, even more holiday destinations, and an infinite variety of lifestyles. There has never been more choice.
Never Judge a Decision by Its Outcome: Outcome Bias
A quick hypothesis: Say one million monkeys speculate on the stock market. They buy and sell stocks like crazy and, of course, completely at random. What happens? After one week, about half of the monkeys will have made a profit and the other half a loss. The ones that made a profit can stay; the ones that made a loss you send home. In the second week, one half of the monkeys will still be riding high, while the other half will have made a loss and are sent home. And so on. After ten weeks, about one thousand monkeys will be left—those who have always invested their money well. After twenty weeks, just one monkey will remain—this one always, without fail, chose the right stocks and is now a billionaire. Let’s call him the success monkey.
How does the media react? It will pounce on this animal to understand its “success principles.” And they will find some: Perhaps the monkey eats more bananas than the others. Perhaps he sits in another corner of the cage. Or maybe he swings headlong through the branches, or he takes long, reflective pauses while grooming. He must have some recipe for success, right? How else could he perform so brilliantly? Spot-on for two years—and that from a simple monkey? Impossible!
The Dubious Efficacy of Doctors, Consultants, and Psychotherapists: Regression to Mean
His back pain was sometimes better, sometimes worse. There were days when he felt like he could move mountains, and those when he could barely move. If that was the case—fortunately it happened only rarely—his wife would drive him to the chiropractor. The next day he felt much more mobile and recommended the therapist to everyone.
Another man, younger and with a respectable golf handicap of 12, gushed in a similar fashion about his golf instructor. Whenever he played miserably, he booked an hour with the pro, and, lo and behold, in the next game he fared much better.
Never Pay Your Lawyer by the Hour: Incentive Super-Response Tendency
To control a rat infestation, French colonial rulers in Hanoi in the nineteenth century passed a law: For every dead rat handed in to the authorities, the catcher would receive a reward. Yes, many rats were destroyed, but many were also bred specially for this purpose.
In 1947, when the Dead Sea Scrolls were discovered, archaeologists set a finder’s fee for each new parchment. Instead of lots of extra scrolls being found, they were simply torn apart to increase the reward. Similarly, in China in the nineteenth century, an incentive was offered for finding dinosaur bones. Farmers located a few on their land, broke them into pieces, and cashed in. Modern incentives are no better: Company boards promise bonuses for achieved targets. And what happens? Managers invest more energy in trying to lower the targets than in growing the business.
