Wine, reading minds, and being wanted

As a Psychologist I’m often asked if I can read people’s minds. Granted, recent developments in neuroscience have made good progress to that direction. Yet, I am just not able to do that. Not that I would want to know what goes on in your twisted mind! Still, I can sometimes predict how most people will behave and what choices they will make in certain situations. Let me show you.

Imagine you were invited to a dinner party and your friends have asked you to bring a bottle of red wine. You don’t know much about wine but you agree to the task. So, you visit your local grocery store only to face an enormous selection of offerings in the wine alley. But, let’s say you have somehow managed to limit the selection. You’ve heard somewhere that Chilean wines are good and you have spotted a few nice-looking bottles with slick labels and proper corks. For some reason you think that wines with corks are better than those with twist caps. You’re wrong but, that’s not the point here and I digress. Ok, let’s say you narrowed it down to 3 wines that tick all the boxes. The first costs €5, the second €10, and the third €15. The question is: which one will you buy?

Until you think about it, let me say that branding, colorful labels, the type of cork, the shape of bottle, the weight of the bottle and many other things, do matter. Not so much for the quality of the wine but more so about whether you will buy it or not. But let’s get back to the problem. All other things being equal except the price, which wine would you buy from the three?

If you are doing ok with money, you will likely go for the most expensive €15 wine. This is because people generally make use of what is known as the “price-quality heuristic". That is, they assume that more expensive items are of higher quality. So, if you don’t (need to) care much about money and want to impress your snob friends who chose wine over beer, you will spend the 15 euros without a second thought. But, let’s say you are a poor student (as I were about a lifetime ago). In that case, you are more likely to rely on the “compromise heuristic” instead. According to the compromise heuristic, when you cannot justify buying the most expensive item but you don’t want to feel/appear cheap either, you compromise. You go for the middle option. In our case, the €10 wine. Indeed, research on consumer behavior indicates that when people are faced with similar dilemmas that call them to decide about things they don’t know much about, they play it safe. They go for the middle option.

Predicting human behavior in the real world can be fun. It’s also quite useful for business and each of us as individuals. That’s why I’m fascinated by Behavioral Economics, a hot new field that combines Psychology and Economics to understand human behavior in everyday life. We all have the impression that we’re unique and different from others and we all think that we think differently (as Apple may want you to believe). Well, we may be unique. Unique, just like everyone else. And that is because we often face the same problems and we use our similar brains to work out the solutions. And we often make decisions based on the same heuristics than on actual knowledge. Which is not necessarily bad. Heuristics are the shortcuts we use to make quick decisions when we don’t have (or don’t want to have) much knowledge and time. Cause after all, who has the time to worry about wine? (Ok, I know…a lot of people do. But who wants to hang around with all those smart-ass wine experts who taste the hint of summer fruit in that 2018 Merlot?)

Now let’s change the wine scenario a bit. Let’s say you own the grocery store and you’d earn more if people bought the €15 wine. Can you make them? The answer is yes. In fact, there are various easy tricks you could do to influence their decision. One of them would be to simply put a 4th wine on the shelf next to the other three and price it at €30. Of course, you don’t expect those poor students to go for it (maybe those rich know-it-all wine experts will). But, just putting up that €30 wine changes the situation dramatically. The €15 wine has suddenly become the middle, compromising option. And you can even push it further. Mark the €15 wine as discounted from €25. Rest assured that we all love the feeling of a good deal.

It turns out that behavioral scientists cannot only predict human behavior in certain scenarios but they can change it as well. By knowing what heuristics the majority of people rely on when making decisions, they can implement subtle nudges that will likely modify behavior. For example, more people would become organ donors if an opt-out procedure were adopted. That’s when you are automatically enrolled in the program and have to do something only if you want out. People usually don’t. They go for the default settings. They go for inertia. Doing nothing is always easier. And you can now think about your Spotify subscription that renewed automatically after the first free month. They got you too, huh?

So, here’s the deal. Behavioral Economics is popular because it has value, real time value, not just scientific value. If you can predict human behaviour, let alone influence it, you can make people do things, which is actually beyond reading minds at this point. You can nudge them to buy a toothpaste that costs more but does nothing different from any other that costs less. You can make them more likely to save energy, recycle, use public transport, eat healthy, or even want you more as a romantic partner. Are you intrigued yet?

If yes, you’re in luck. The Department of Economics and the Department of Psychology of the University of Cyprus are jointly running the Master (MSc) in Behavioural Economics @ University of Cyprus . It’s in English and it’s quite popular. But, positions are limited so you need to hurry up. Click this link:

But you decided to continue reading and frankly, I’m impressed you came this far. So let me reward you with another little secret from Behavioral Economics. If you want to make people interested in something, you can say it’s scarce and that everyone wants it. Say it’s popular and that positions are limited (well in our case they are indeed limited, trust me). And you can now think about your love life and how to make yourself wanted. Oh, and if you’re still thinking about the wine, here’s a fun fact. If you get white wine and color it red with an odorless red dye that does nothing to the taste, you can even get those wine connoisseurs to describe it as warm and fruity. And more so if you dim the lights and light the candles.

Cheers.

See you in class. Apologies to know-it-all wine experts and poor students