Tag Archive for: Freakonomics

SuperFreakonomics and Monkey Business

Have you read SuperFreakononics yet, the follow up to Freakonomics? If not you’ll want to pick it up because it’s an interesting way to apply economic theory to different aspects of life. If you enjoyed Freakonomics, you’ll like SuperFreakonomics too.

I’m not here to plug the book, rather, I want to share something I found fascinating that relates to the Principles of Influence I share each week in this blog. What I’ll share has to do with scarcity, the principle of influence that tells us people are motivated to action when they believe something is rare or becoming less available.

Another aspect of scarcity is this – people tend to be more motivated to action when they stand to lose something as opposed to when they stand to gain the very same thing. For example, if I’m selling a product and tell potential customers, “If you don’t buy our product, you’ll lose $750 dollars a year,” that will persuade more people to buy the product than if I said, “If you buy our product you’ll save $750 a year.” Think about the mental picture for a moment. The first appeal, losing, makes most people think about reaching into their pocket and handing over their hard earned money. I don’t know about you but that’s something I don’t particularly like doing so I’ll do what I can to avoid it.

The last chapter of SuperFreakonomics is called, “Monkeys Are People Too.” I almost skipped it and I’m sure glad I didn’t! It deals with whether or not monkeys can be taught how to use money and place value on things as humans do. In the case of monkeys, it was valuing treats.

It turns out they can learn the money/value concept so the person teaching the monkeys tried different things to see how far reaching their grasp was. One way they tried this was gambling. The monkeys could literally bet, possibly winning more treats, or possibly losing treats.

What really fascinated me was this – the monkeys responded more to the potential gambling loss than the potential gain which led the authors to write, “A rational monkey wouldn’t have cared, but these irrational monkeys suffered from what psychologists call ‘loss aversion.’ They behaved as if the pain from losing a grape was greater than the pleasure of gaining one.”

Just like people, monkeys seem to be hard-wired to avoid loss more than they are attracted to pleasure. And here’s another way they are very much like humans in this regard; the authors went on to write, “people make the same kind of irrational decisions at a nearly identical rate.” There are a few other fascinating insights with the monkeys – how they used the money and how it changed their behavior. They quite literally engaged in “monkey business” but I’ll leave it to you to read that on your own.

So what does this mean to you? First, as I’ve shared before, the principles of influence do not guarantee everyone will do what you want. But, ethically employed, utilizing the principles can make you much more successful. I write that with confidence because scientific studies show this to be the case.

With a principle such as scarcity, things are going on inside our brains that quite often we’re not aware of. Whether on a conscious or subconscious level, we want to avoid pain and obtain pleasure. The key thing to remember is this – most people want to avoid pain more than they seek to obtain pleasure.

And now we come to the take-away; next time you want to motivate someone to take action, and you can phrase your request in such a way that has an upside or a downside, you’ll be more likely to hear “Yes” by telling them about the downside as opposed to the upside. (Drawing by Michael Franzese, Franzeseinklings)

I’ll end by saying, this approach has nothing to do with being a positive or negative person, this is about being successful or unsuccessful with regard to your attempt to influence people. Agree? Disagree? Leave a comment below to let me know what you think.

Helping You Learn to Hear “Yes!”