8 Experiments Which Prove How Irrational We Really Are

We love this blog post by Zoltán Gócza at uxmyths.com.
Shows how irrational we really are when it comes to buying stuff.
I’m sure we all like to think that we buy things based on our careful analysis of the price and benefits, but really we are a little more illogical than that.
This irrational behaviour is hard-wired into our brains and isn’t going to change any time soon, so think about how you could use this in your own business to improve the results you get from your promotions.
I find it so interesting how the subtlest of changes to the presentation of an offer can dramatically change its uptake.
Check out the excerpt below:
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8 experiments to prove our irrationality from the books Predictably Irrational and How We Decide:

1. People are bad at comparing things in an absolute way In an experiment, participants were asked to choose from differently priced offers. The experimenters found that they can double the “sales” of an expensive offer by simply adding another similarly priced offer that was inferior in quality. This offer was a so called decoy whose only purpose was to influence people to buy the original item.
2. People think in relative terms Another experiment shows that people would spend 15 minutes walking to save $7 on an $18 item but wouldn’t take the same 15-minute trip to save the same amount on a $455 item. If people were rational, the price of the item wouldn’t matter to them, only that seven dollars can be saved with a 15-minute walk.
3. Our first experiences become imprinted in our brain In an experiment, participants were asked whether they would pay a given price for a specific item. Then the participants were asked to make their own bids on the same item. The experiment found that the participants’ own bids were heavily influenced by the price they first saw: people made higher bids when they saw higher initial prices. This is called the anchoring effect.
4. People prefer free offers to better bargains People rather take a $10 Amazon gift certificate for free than buy a $20 gift certificate for seven dollars. When Amazon’s French division moved from charging a negligible shipping fee of 20 cents to free shipping, their sales dramatically increased. Read more on the power of free.
5. People irrationally overvalue what they own We value more what we already own. An experiment showed that basketball fans who owned a ticket to a given game would sell it for about $2,400, though those who didn’t own a ticket would only pay an average of $170 for one.
6. Our prior expectations greatly influence our experiences Coke fans like Coke better mainly because of Coke’s brand, not because its taste. Experiments show that more expensive painkillers are more effective than cheaper or discounted ones (because of the placebo effect).
7. We respond differently to a question if it’s worded differently People make different choices depending on what the default answer is, or whether the description emphasizes what one can gain or what one can lose. This is the effect of framing.
8. We’re impatient Analyzing a promotion of actual credit card companies, Lawrence Ausubel found that the majority of people fall for low teaser rates even if the lifetime rate is significantly higher. Another experiment shows that people prefer getting an Amazon gift certificate immediately over waiting 2-4 weeks to get a bigger gift certificate.

Original article (with a few awesome book recommendations) can be found here
PS. One of the recommendations they list (called ‘Yes!’) – is a book I’m about halfway through reading at the moment, would definitely recommend it if you love this sorta stuff!
Cheers,
Ray Corcoran