- Social Proof - People tend to trust the opinions and actions of others, especially those who are similar to them. This concept was introduced by Robert Cialdini in his book "Influence: The Psychology of Persuasion." In a classic study, Cialdini and his colleagues found that hotel guests were more likely to reuse towels when they were told that the majority of other guests had reused their towels. This study showed that people are more likely to follow a behavior if they see that others are doing it as well.
- Scarcity - People tend to place a higher value on things that are scarce or limited. A study conducted by Worchel, Lee, and Adewole (1975) demonstrated this effect. Participants were presented with two jars of cookies, one with ten cookies and the other with two. They were then asked to rate the cookies in terms of desirability. The cookies in the jar with only two cookies were rated as significantly more desirable than the cookies in the jar with ten cookies.
- Reciprocity - People tend to feel obligated to reciprocate when someone does something for them. This concept was introduced by Regan (1971) in his "reciprocity norm" study. Participants were paired with a confederate who bought them a Coke before asking them to buy raffle tickets. Participants were more likely to buy the raffle tickets from the confederate who had bought them a Coke, showing that they felt obligated to reciprocate the favor.
- Authority - People tend to trust and respect authority figures. This concept was introduced by Stanley Milgram in his "obedience to authority" study. Participants were asked to administer electric shocks to a "learner" when they gave the wrong answer to a question. The shocks increased in intensity with each wrong answer. Despite the learner's screams and protests, many participants continued to administer the shocks when told to do so by the "experimenter," who was an authority figure.
- Anchoring - People tend to make decisions based on the first piece of information they receive. This concept was introduced by Tversky and Kahneman in their study on "judgment under uncertainty" (1974). In one experiment, participants were asked to estimate the percentage of African countries that were members of the United Nations. Before making their estimate, they were asked to spin a wheel of fortune that had numbers ranging from 0 to 100. Participants who spun a higher number provided higher estimates than those who spun a lower number, showing that the first piece of information they received (the number on the wheel) influenced their decision.
- Framing - People tend to perceive information differently depending on how it is presented. This concept was introduced by Kahneman and Tversky in their study on "prospect theory" (1979). In one experiment, participants were given the choice between a certain gain of $3,000 or a 50% chance of gaining $6,000. Most participants chose the certain gain. However, when the options were framed as a certain loss of $3,000 or a 50% chance of losing $6,000, most participants chose the gamble. This study showed that people are more sensitive to losses than gains, and that the way information is presented can influence their decision-making.
- Loss aversion
Loss aversion is a cognitive bias that describes how people tend to strongly prefer avoiding losses to acquiring gains. This means that people often feel the pain of losing something more strongly than the pleasure of gaining something. So, if you can emphasize what people will lose if they don't buy your product or service, they may be more likely to take action.
For example, a study conducted by psychologists Amos Tversky and Daniel Kahneman in the 1980s showed that people are more willing to take risks to avoid losses than they are to achieve gains. In the study, participants were given a hypothetical scenario where they had to choose between two options:
Option A: A guaranteed gain of $1,000
Option B: A 50% chance of gaining $2,000 or a 50% chance of gaining nothing
Most participants chose Option A, even though Option B had a higher expected value. However, when the scenario was changed to focus on losses rather than gains, participants' choices changed:
Option C: A guaranteed loss of $1,000
Option D: A 50% chance of losing $2,000 or a 50% chance of losing nothing
In this case, most participants chose Option D, even though it had the same expected value as Option B from the first scenario.
So, in order to use loss aversion to your advantage in sales or job interviews, you can emphasize what people will miss out on if they don't take advantage of your offer. For example, you could highlight the limited-time availability of a product or service, or emphasize the unique features that set your offering apart from competitors. In a job interview, you could emphasize how your skills and experience make you a unique asset to the company, and how the company would miss out on the opportunity to work with you if they don't hire you.
