Category: business
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The Cashless Effect: Financial Abstraction Increases Spending
I previously wrote about the denomination effect, where people spend the coins faster than banknotes because coins are perceived as ‘smaller’, creating fewer psychological barriers. This raised the question of whether increased “financial abstraction” leads to higher spending, too. Indeed, research confirms that the lower the payment transparency, the greater the spend. This is the cashless…
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Cake Mixes, the IKEA Effect, and the Psychology of Effort
In the index of cognitive biases (previously), I came across the IKEA effect: why do we place disproportionately high value on things we helped to create? Similar to the endowment effect (our tendency to overvalue our own belongings), the IKEA effect explains why we’re willing to pay a significant premium (over 60%!) for products that…
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FAST not SMART for Goals
The conventional SMART approach for setting goals undermines higher-level (team and/or organisational) objectives by promoting an individualistic and isolated approach to work. The best approach for creating effective goals, according to researchers at MIT Sloan, is to go FAST: Frequently discussed; Ambitious; Specific; and Transparent. According to their meta-analysis and additional field research across companies…
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The (Edited) Latecomer’s Guide to Crypto
On March 20, 2022, the New York Times published a 14,000-word puff piece on cryptocurrencies, both online and as an entire section of the Sunday print edition. Though its author, Kevin Roose, wrote that it aimed to be a “sober, dispassionate explanation of what crypto actually is“, it was a thinly-veiled advertisement for cryptocurrency that…
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Apple’s Implementation of the Duration-of-Exposure Effect: Screens at 70˚
Hours after writing about the duration-of-exposure effect (whereby merely touching an unowned object increases our attachment to it and how much we value it), a post came into my feed reader pointing out how Apple Inc. take advantage of this effect in their “painstakingly calibrated” stores. Carmine Gallo, providing a glimpse into his upcoming book, The Apple…
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Personal Pronouns as Relationship and Company Indicators
The personal pronouns used by couples during “conflictive marital interactions” are reliable indicators of relationship quality and marital satisfaction, according to a study tracking 154 couples over 23 years. The study showed that ‘We-words‘ (our, we, etc.) were indicative of a more positive relationship than ‘Me- and You-words‘ (I, you, etc.) (doi). Using We-ness language…
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Entrepreneurship and the Possibility of Real Failure
In 2007 Vinicius Vacanti quit his highly-paid job in finance to take on life as an entrepreneur. In a short post describing his reasons for doing so, Vacanti says that most of us haven’t faced the possibility of real failure, and entrepreneurship is a way to test your limits by attempting to create something of…
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Dark Patterns for Marketers, or: Practical Behavioural Economics
Taking a systematic approach to implementing findings from behavioural economics into a sales cycle can “unlock significant value”, according to McKinsey’s Ned Welch. To help business do exactly that, Welch–in what, at times, reads a bit like a ‘dark patterns guide for marketers’–has written an article looking at four practical techniques from behavioural economics that marketers should use…
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Common Misconceptions About Publishing and Writing
After realising that “many people don’t have the first clue about how the publishing business works — or even what it is“, the somewhat prolific science fiction writer Charlie Stross decided to do something about it. The result was a series titled Common Misconceptions About Publishing. This is admittedly only one author’s viewpoint and set of opinions,…