Intellectual Imprints #003 Five more reasons why you are acting the way you are

My last post in this section introduced my understanding on the topic of Behavioral Economics. Do take a look to see the source of my learnings and the background to this series by clicking on the link above. 

I will now share with you five more non conscious inclinations or biases that make us act the way we do. This time too I have tried to use topical and relevant examples to bring alive the meaning of the concepts. A caveat - while the first four are from the books mentioned in the previous part of this post - the last theory is actually in response to a query I received from one of my readers. This too is from my readings over the years but I'm unable to put a finger on the exact title.

Anchoring

This bias comes in when a particular benchmark carries a disproportionately high weight in reading a situation or making a decision. If we look at the doubling rate of COVID-19 cases in Mumbai - the situation is indeed seeing a huge improvement. Out thoughts are anchored on that benchmark. However if we look at the same numbers in their actual sense it may seem a tad more worrisome. The same information can be presented with a different anchor to get a different desired reaction. 

Status quo bias

As the name suggests this bias is towards the current state of affairs continuing the way they are. Sometimes irrespective of whether that is the actually a better option. A simple example is the QWERTY keypad which was designed to increase efficiencies in a typewriter, which unfortunately continues to be used despite no apparent upside to it.

As we move along to yet another month of working from home - the disucssions are slowly evolving. From how this was not a very productive set up to how it makes more sense. May be there are some inherent advantages of working from home, or then again maybe its just the status quo bias creeping in...

Scarcity principle

Simply put, humans place a higher value on an object that is scarce, and a lower value on those that are in abundance. We all witnessed this principle take shape very recently when alcohol was not so easily available unless you were well connected or then adequately stocked. Suddenly the value and hence price of your favourite malt had sky rocketed and was still something you were willing to invest in.

Make it simple

The best way to create behavior is to make it easy. As simple as this point seems, it plays more of a role in our actions than we would like to credit it with. This would probably explain why we are seeing more and more octogenarians, vegetable vendors, house helps, building staff getting proficient in the use of digital money exchange through Google Pay, Paytm and other gateways that have brought down the process to a mere two-three step action. The lack of any other option today makes it even easier to adopt the habit.

Bingeing offset

So this was the query I received - which of these biases leads to us binge shopping. Well, bingeing is more to offset something else that is unpleasant... so we feel cooped up all day we binge watch TV at night... we are bored or unhappy we binge on chocolates. The splurging our mind allows us to make in one area is often to compensate for the pain we are suffering somewhere else. No wonder then, many people seem to complaining about overeating, oversleeping, too much of OTT viewing, too much of gaming or then too much of shopping.

That concludes this series - I hope you enjoyed reading it as much as I enjoyed thinking up of examples for each theory. Would love to hear from you, in the comments below, on how you have seen these biases take shape in your mind.