At this year’s ESOMAR Congress one of the keynote speakers was Jonah Lehrer author of the book ‘The Decisive Moment – how the brain makes up its mind ‘(titled How We Decide in the US). The presentation was interesting, eclectic, but perhaps lacking a central narrative theme.
Lehrer’s book is highly readable, packed full of interesting material, but like his presentation lacks a narrative theme. If you have not read Dan Ariely’s ‘Predictably Irrational’ and Martin Lindstrom’s ‘Buyology’, then I would suggest reading Lehrer’s book first. I say this as I think the ideal use of Leherer’s book is as a primer in the area of how neuroscience and behavioural economics are shaping our developing understanding of how decisions are made, and their impact on brands and markets.Even if you have read several of the key books in this exciting area, I would suggest reading the book as a) it is quick and fun to read, b) is packed full of case studies and examples you will want to use and quote.
Amongst the many cases in Lehrer’s book here are two which highlight their usefulness.Thinking hard does not always help
In the 1980s the US magazine Consumer Reports conducted a test of 45 different strawberry jams, using food experts who were trained sensory panellists. Timothy Wilson, from the University of Virginia re-visited this test using ordinary people, well undergraduates, in a paper he published in 1991. Wilson took five of the jams, (the best, the worst, and three spaced across the range), and asked the students to rank them. The results from this cell were fairly similar to the expert panel. Another group of students were asked to rate the characteristics of the jams before saying how much they liked them. In this second group there was almost no correlation with the expert panel. Wilson’s conclusion was that thinking actually led people to be confused about which items they liked. Lehrer goes on to quote other studies that took the issues further. The implications for scale-based market research are clear. Ask the wrong questions, in the wrong order, and you risk getting misleading answers!
Classical Economics is Wrong
Lehrer’s example of the failings of traditional economics, and therefore the need to understand behavioural economics was equally simple and stark, using something called the ultimatum game. Subjects are put into pairs, one player is given $10 and told they can make any offer they want to the other player, ranging from keeping the whole $10 through to giving the other player $10. The other player then decides to whether to accept the deal. If they accept the deal, both players get the money, if they reject it, neither gets anything.
Traditional economics would say that the first player should tend to offer a small sum, since the second player will maximise their profit by accepting anything higher than $0. However, two interesting phenomena emerge when this game is played and analysed. 1) The average offer tends to be close to $5 and 2) when low amounts are offered it is not unusual for the second player to reject the deal, preferring to walk away with nothing rather than endorsing an unfair deal.Overview
Although I think the book would be even better with a clearer focus, it is nevertheless well worth the cover price, and if you get the chance to see Lehrer speak I would recommend it.