Cognitive biases because of limited cognitive capacity

Despite humans being the most evolved animals cognitively, there are limits to our cognitive capacity. At the front of our brain lies an area called the prefrontal cortex. Compared to other animals, this part of the brain is more strongly developed in humans. This area plays an important role in our decision-making, and really distinguishes us from other animals. However, throughout evolution this part of the brain was primed for survival and efficiency, instead of carefully picking the most optimal option. Situations in which the limits of our cognitive capacity are exposed include: being presented with too much information at a single moment, causing us to filter out most of this information. Our memory is also prone to these effects, causing us to remember only the most important things. In both cases, crucial information can be lost. Sometimes, instead of getting too much information, we are presented with too little information to understand a situation, in which cases we tend to fill in the gaps ourselves. The information we use to fill in the gaps can still be incomplete, or even worse, completely wrong. Sometimes we have to make quick decisions, without having time to thoroughly analyze the situation. In all these cases, cognitive biases are very common.

10 common cognitive biases in consumer behavior

In psychology there has been a lot of research regarding cognitive biases. Many marketeers and advertisers are aware of the existence of these cognitive biases, and take this knowledge into account when creating ads or campaigns. In this blog posting 10 of the most common cognitive biases in consumer behavior are listed, accompanied by some examples of how they are used by marketeers to optimize their ads or campaigns.

  • Mere exposure effect: This effect describes people’s tendency to like a product they are repeatedly exposed to, no matter what the product is. This is caused by people getting familiar with the product, which facilitates them liking it. This is the reason advertisers ideally want to show you their ad as many times as possible.

 

  • denkfoutenAuthority bias: This cognitive bias describes people’s tendency to weigh the opinion of an authority figure more heavily. Also, they are more easily influenced or convinced by authority figures. A classic example of how this cognitive bias is used by marketeers to influence consumer behavior is ads for toothpaste. In these ads, the toothpaste is always presented alongside some expert “dentists”. In reality, more often than not these “dentists” are just actors, wearing a lab coat. Research has shown that this doesn’t even matter for the effectiveness. The effect already happens when people look like authority figures, no matter whether they actually are experts on the subject, or just pretend to be.

 

  • Bizarreness effect and Humor effect: These two effects are very similar, and describe people’s tendency to remember bizarre and humorous things better than non-bizarre and non-humorous things. The most memorable ads usually contain both. A famous Dutch example is the ad-campaign by insurance company Centraal Beheer: “Even Apeldoorn bellen…” (Dutch ad, but English-speakers will understand why the ad is both bizarre and funny).

 

  • denkfoutenDecoy effect: This cognitive bias describes a situation in which people are influenced into making an alternative decision to what they would have initially chosen, by adding a decoy. We already discussed this in an old but relevant blog posting about the Decoy effect and digital nudging. This cognitive bias is used a lot by marketeers and advertisers to influence consumer behavior. Take a look at the image presented next to this paragraph. It works like this: Consumers can choose between two buckets of popcorn. A small one for $3, or a large one for $7. In this situation, a lot of people choose for the small bucket, because the large one seems unreasonably priced. However, when we add a third option, a medium sized bucket that costs $6.50, consumer behavior changes. Now, because of the medium option, the large bucket seems like a much better deal. Research has shown that in this situation people choose the large bucket significantly more than when they just had the small and large option.

 

  • Primacy effect and Recency effect: These effects are also very similar in nature. They describe people’s tendency to better remember either the first or the last thing mentioned. Advertisers use this knowledge by presenting the most important information, like the name of the product, a website address, or the brand, at the start and/or end of an ad.

 

  • Framing effect: This effect describes people’s tendency to be influenced in their decisions by the way a proposition is framed. Examples are the famous “Because you’re worth it” campaign by L’Oreal, which suggests that you aren’t worth it if you don’t buy their product. Another example is an ad by an insurance company that frames their ad by describing a horrible situation in which an insurance would come in very handy. Also, research has shown that people are more likely to take a risk when a message is framed negatively, and less likely to take a risk when it’s framed positively.

 

  • denkfoutenBandwagon effect: This effect describes how the chance of people adopting certain ideas or making decisions increases when more other people have made these same adaptations or choices. Underlying mechanisms of this cognitive bias are people’s need to conform to a group norm, and the use of other people’s choices as information for making your own choices. A classic example how marketeers use this cognitive bias in influencing consumer behavior is presenting their product alongside statements as “#1 most bought”, “the fastest selling product!” etc. Showing other people’s product reviews and testimonials also builds on this same principle.

 

  • Post-purchase rationalization: Last but not least, a cognitive bias that a lot of consumers have: searching for reasons that justify the decisions they made. The reason for this behavior is people being uncomfortable with cognitive dissonance – meaning: detecting an inconsistency in their thoughts and their behavior. People don’t want to feel foolish for having made a decision that left them unsatisfied, so they look for reasons why their choice (even the bad ones!) was actually a good one. Marketeers use this knowledge by comforting their customers throughout the sales process and even after that, by taking away as much doubt as possible, and confirming that they have made the right choice.

Are you interested in cognitive biases? They are neatly grouped and visualized in this map. In most cases, those cognitive biases have sophisticated Wikipedia pages – very well suited for binge Wikipedia-sessions when you’re bored!

At som digital we take these cognitive biases into account, and use this knowledge in a persuasion-context. Do you want your company to profit from this? Don’t hesitate, contact us.