Dealdilemma_image

Meet the Author

  • Anna Sterner
  • Marketing Manager

Anna has several years of experience of working with marketing in a number of European countries. Her passion for branding led her to London, where she recently completed a MA in Brand Communication at Goldsmiths University of London. In the role as Marketing Manager at Lab, she ensures that we remain top of mind amongst digital agencies in the UK. 


annasterner [12:58 PM] Anna has several years of experience of working with marketing in a number of European countries. In the role as Marketing Manager at Lab, she ensures that we/our brand remain/s top of mind amongst digital agencies in the UK.

Takeaways

  • We all make hundreds, if not thousands, of decisions every day.
  • Our decisions are influenced by cognitive and behavioural biases that don’t always result in outcomes we expect.

Deal or No Deal


07 December 2016
Thought Leadership
5 mins

We all make hundreds, if not thousands, of decisions every day. Our decisions are influenced by cognitive and behavioural biases that don’t always result in outcomes we expect.

To show exactly how much we are influenced by cognitive biases, we teamed up with content production agency Amoveo and went out on the streets of London to do an experiment.



So why didn’t people switch?

We know the psychological pain of losing something is roughly twice as powerful as the pleasure of gaining something. So, when holding a box in your hands that may contain money, the thought of losing that by switching causes you to be more likely to stick with it.

People also tend to assume when you have the choice of keeping the box you selected or switching, it’s a 50-50 chance of winning the money either way. But this isn’t the case.

The Logic

There is a 1/3 chance of the money being in the box you initially chose, and a 2/3 chance that the money isn’t in the box you initially chose. After removing one of the other boxes to reveal sweets, there’s still a 1/3 chance that the money is in the box you’ve chosen and a 2/3 chance that the money isn’t in the box you’ve chosen.

This means that there is a 2/3 chance that the money isn’t in the box you’ve chosen, and that it’s a 2/3 chance that the money is the box left on the tray.

Another way of looking at it…

Imagine that instead of 3 boxes, there are 100 boxes. All of them have sweets inside of them - except one, which has the money. You choose a box, say, box number 53. At this point, all of the other boxes except one are opened - all containing sweets. You are given the offer to switch to the other box. Would you switch?

You might think “Why would I? Maybe I actually picked the correct box on my first guess.” But what’s the probability that that happened? 1/100 or 1%. In other words: there is a 99% chance that the money isn’t in the box you initially chose.

If it’s not in the box you chose, it must be in the other box left for you. By removing all the other boxes containing sweets, you have been given the opportunity to choose a box that has a 99% chance of having the money in it. This is because your box and the box left must add up to 100% in total probability. Therefore if you switch, you would have a 99% chance of winning.

It’s up to you which option you find most attractive, a 99% chance of not getting the money or a 99% of getting the money. We know what we would go for…

Our approach

At Lab, we believe that understanding why people do what they do is key when creating successful digital experiences. By using an unique approach based on established psychological theories, we are able to understand customers and make better predictions of their responses.

The Deal or no Deal Dilemma is one of several experiments we have run to get a better understanding for human behaviour. In The Halo Effect we combined video and neuroscience techniques to test the effects that making small changes had on the overall experience, and in Curiosity in the Lab we wanted to discover the sensory preferences, knee-jerk reactions and intrinsic motives of users.

  

 

 


Takeaways

  • We all make hundreds, if not thousands, of decisions every day.
  • Our decisions are influenced by cognitive and behavioural biases that don’t always result in outcomes we expect.

Meet the Author

  • Anna Sterner
  • Marketing Manager

Anna has several years of experience of working with marketing in a number of European countries. Her passion for branding led her to London, where she recently completed a MA in Brand Communication at Goldsmiths University of London. In the role as Marketing Manager at Lab, she ensures that we remain top of mind amongst digital agencies in the UK. 


annasterner [12:58 PM] Anna has several years of experience of working with marketing in a number of European countries. In the role as Marketing Manager at Lab, she ensures that we/our brand remain/s top of mind amongst digital agencies in the UK.