#loss aversion

[nofatclips-home]

Benn Jordan on How Brands Manipulate You To Be Loyal

[thepsychologyofmoneypodcast]

Cybersecurity Paranoia: Essential Fear or Business-Killing Anxiety?

I still remember the call. It came in at 2:17 AM on a Tuesday. On the other end was the CEO of a promising fintech startup I’d been advising, his voice a ragged whisper, stretched thin by panic. “We’re locked out,” he said. “Everything. They’re demanding 20 million. But… that’s not the worst part. They have the source code. They have our client list. They say they’re giving it all to our biggest competitor if we don’t pay in 12 hours.”

His company, a vibrant venture built on brilliance and bravado, was gone. Wiped out in the time it took to read a single ransom note. He’d once joked with me about my "healthy dose of paranoia," teasing that I saw ghosts in the machine. He wasn’t laughing now.

That was a few years ago. Today, in 2025, that story feels almost quaint. The ghosts in the machine have become a legion, and they’re not just rattling chains; they’re rewriting the rules of business itself. This has forged a new, sharp-edged question in the heart of every entrepreneur I meet: Is this constant, gnawing fear of a cyberattack an essential survival instinct, or is it a business-killing anxiety that strangles growth before it can even draw breath?

This isn’t a theoretical debate. It’s the central conflict shaping the next generation of enterprise. We stand at a crossroads where heightened vigilance and loss aversion paranoia look nearly identical from a distance. One path leads to resilient wealth; the other, to the slow death of innovation. As someone who has spent two decades on the front lines of this digital war, I can tell you the line between them is perilously thin, and learning to walk it is the single most critical skill for a modern founder.

The New Face of Fear: Understanding the 2025 Threat Landscape

To grasp the entrepreneurial mindset, you first have to understand what’s keeping them awake at night. The cyber threats of 2025 are not just scaled-up versions of old viruses. They are a different species entirely—smarter, more insidious, and deeply personal.

Forget the scattershot phishing emails of the past with their clumsy grammar. Today, we’re fighting AI-driven spear-phishing campaigns that are terrifyingly effective. Imagine an attacker scraping your LinkedIn profile, cloning your board chairman’s voice from a recent podcast appearance, and then calling your CFO with a completely convincing, AI-generated deepfake. The AI analyzes your company’s public data to reference a recent deal, mimics the chairman’s speech patterns, and creates a sense of urgency that bypasses all human skepticism. This isn't science fiction; it's happening right now. The attacker’s AI is talking to your AI assistant, negotiating access, and probing for weaknesses 24/7, relentlessly seeking a crack in the armor.

This is the era of hyper-personalized attacks. The adversary knows your org chart better than you do. They understand the personal pressures your team members are under. They don't just hack systems; they hack human trust.

Simultaneously, the battlefield has expanded from our servers and laptops to every corner of our lives. The Internet of Things (IoT) was supposed to usher in an age of seamless convenience. Instead, it has become a sprawling, undefended frontier. That smart thermostat in your office, the connected coffee machine in the breakroom, the networked security cameras—each is a potential back door into your kingdom. I worked with a logistics company that suffered a massive data breach originating from a compromised smart sensor on one of their shipping containers. The initial point of entry wasn't their multi-million-dollar firewall; it was a $50 gadget floating in the middle of the Pacific Ocean. This exponential increase in the attack surface means the old castle-and-moat model of security is dead. The enemy is already inside the walls.

And then there's ransomware. The game has changed from simple extortion to something far more sinister. It's no longer just, "Pay us to get your data back." It’s a multi-pronged assault. First, they steal your data. Second, they encrypt your systems to halt your operations. Third, they threaten to publish your most sensitive files—intellectual property, employee records, embarrassing internal emails—on the dark web. Fourth, they might launch a DDoS attack to take your public-facing website offline. And fifth, as in my client’s case, they’ll threaten to sell your proprietary data directly to your competition. This multi-layered coercion is designed to induce maximum psychological pressure, forcing a payout by turning a company’s deepest fears into a public spectacle.

The Prudent Protector: When Fear Is Your Greatest Asset

Faced with this terrifying reality, it's easy to see why some entrepreneurs have embraced what I call Essential Fear. This isn’t a state of panic, but one of profound, rational respect for the threat. These founders treat cybersecurity not as an IT problem but as a core business function, as vital as finance or marketing.

I know a founder, let’s call her Anya, who built her AI-driven healthcare platform with this mindset from day one. Her investors were pushing for a rapid market launch, but she held back, insisting on a rigorous, top-to-bottom security audit first. She channeled a significant portion of her seed funding into building a "zero trust" architecture—a system where no user or device is trusted by default, whether inside or outside the network. Her mantra was, "Assume the breach."

Her team grumbled. The board was impatient. But six months after her slightly delayed launch, a massive, industry-wide attack took down two of her main competitors. They were offline for weeks, bleeding clients and suffering catastrophic reputational damage. The attackers had used a zero-day vulnerability in a common software library that Anya’s "paranoid" audit had identified and patched.

Her heightened vigilance didn’t just protect her wealth; it became her most powerful marketing tool. In the chaos that followed the attack, she won over her rivals' biggest clients, not because her product was marginally better, but because it was demonstrably safer. Trust became her key differentiator. For Anya, fear wasn't a handicap; it was a focusing lens that clarified priorities and ultimately accelerated her success. She understood that in the digital economy, resilience is a feature.

This is the productive side of paranoia. It’s the voice that pushes you to run drills and test your backups. It’s the discipline to enforce multi-factor authentication for everything. It's the wisdom to invest in cyber insurance and have an incident response plan ready before the crisis hits. This fear is a strategic asset. It allows you to build a company on a foundation of rock instead of sand, ensuring that a single storm can't wash away everything you’ve built.

The Anxious Innovator: When Fear Becomes the Cage

But there’s a dark side to this coin. For every Anya, I meet a dozen entrepreneurs who have allowed fear to curdle into business-killing anxiety. This is where the powerful instinct for loss aversion—our natural tendency to fear losses more than we value equivalent gains—goes into overdrive and stifles innovation at its source.

Consider another founder I advised, a brilliant engineer named Ben. He had developed a groundbreaking manufacturing process but was utterly terrified of his IP being stolen. This fear manifested as a debilitating paralysis. He refused to use mainstream cloud providers, insisting on building and maintaining his own costly and complex on-premise servers. He resisted collaborations with larger partners, convinced they were just trying to steal his secrets.

His team, once excited and agile, became bogged down in endless security protocols. Every new software tool required a month-long review. The simple act of sharing a file became a bureaucratic nightmare. Ben’s constant warnings about threats, his suspicion of new technologies, and his reluctance to move quickly created a culture of fear. Creativity withered. The best talent left, frustrated by the friction and the lack of trust.

While Ben was building his impenetrable fortress, a more agile competitor, one with a balanced approach to risk, launched a similar product. They used a secure, industry-standard cloud platform, collaborated openly with partners, and captured the entire market. Ben’s company didn’t fail because of a cyberattack. It failed because the fear of a cyberattack stopped it from ever truly competing.

This is the danger of unchecked paranoia. It creates a "no-risk" culture, which is inevitably a "no-reward" culture. It prioritizes the preservation of what exists today over the creation of what could be tomorrow. The opportunity cost is immense. The very act of entrepreneurship is about taking calculated risks. When loss aversion becomes the dominant force in your decision-making, you cease to be an entrepreneur. You become a museum curator, guarding the past instead of building the future.

From Paranoia to Productive Paranoia: Finding the Razor’s Edge

So, how do we harness the essential energy of fear without succumbing to the paralysis of anxiety? The answer lies in transforming vague, ambient dread into a focused, strategic discipline. I call this Productive Paranoia. It’s an approach built on three core pillars.

First, replace fear with facts through threat modeling. Instead of worrying about every possible threat under the sun, sit down and ask specific questions. Who would want to attack us, and why? Are we a target for industrial espionage, financially motivated ransomware gangs, or hacktivists? What are our "crown jewels"—the one or two data assets that, if compromised, would kill the company? Once you know what you’re protecting and from whom, you can allocate your resources intelligently. This turns a formless anxiety into a concrete list of priorities.

Second, frame security as a business enabler, not a cost center. The race car analogy is one I use constantly: high-performance brakes don’t exist to make the car slow. They exist to allow the car to go incredibly fast safely. The same is true of cybersecurity. Robust security allows you to enter new markets with stringent data regulations. It allows you to earn the trust of enterprise-level clients. It gives you the confidence to adopt cutting-edge technologies like AI and advanced cloud services, knowing you have the guardrails in place. When you see security as a feature that accelerates your journey, your entire perspective shifts from one of fear to one of opportunity.

Third, build a human firewall. The greatest vulnerability in any organization isn’t a piece of software; it’s the human brain. But you can’t fix that with fear-mongering. A culture where employees are terrified to click a link or report a mistake is a culture where threats will fester in the dark. Instead, build a culture of security awareness and shared responsibility. Train your people continuously. Run phishing simulations not to name and shame, but as learning opportunities. Empower every single employee, from the intern to the CEO, to be a security sensor for the organization. An engaged, educated, and empowered team is infinitely more effective than any single piece of technology.

The entrepreneurial journey of 2025 is a high-wire act, performed over a chasm filled with threats we are only beginning to understand. Tipping too far to one side leads to a reckless plunge; tipping too far to the other leads to a frozen state of inaction, which is just a slower way to fall.

The winners won't be the fearless, for they are fools. They won't be the fearful, for they are paralyzed. The winners will be the ones who have mastered the art of Productive Paranoia—the ones who have learned to listen to the whisper of fear, not as a command to stop, but as a guide on how to proceed with wisdom, courage, and resilience. They understand that in this new landscape, the greatest risk isn’t being hacked. It’s being too afraid to build something worth hacking in the first place.

[religion-is-a-mental-illness]

Why Dumb Ideas Capture Smart and Successful People

Intelligent individuals are better at understanding the reputational consequences of their beliefs

By: Rob Henderson

Published: Nov 19, 2023

Many have discovered an argument hack. They don’t need to argue that something is false. They just need to show that it’s associated with low status. The converse is also true: You don’t need to argue that something is true. You just need to show that it’s associated with high status. And when low status people express the truth, it sometimes becomes high status to lie.

In the 1980s, the psychologists Richard E. Petty and John T. Cacioppo developed the “Elaboration Likelihood Model” to describe how persuasion works. “Elaboration” here means the extent to which a person carefully thinks about the information. When people’s motivation and ability to engage in careful thinking is present, the “elaboration likelihood” is high. This means people are likely to pay attention to the relevant information and draw conclusions based on the merits of the arguments or the message. When elaboration likelihood is high, a person is willing to expend their cognitive resources to update their views.

Two paths to persuasion

The idea is that there are two paths, or two “routes,” to persuading others. The first type, termed the “central” route, comes from careful and thoughtful consideration of the messages we hear. When the central route is engaged, we actively evaluate the information presented, and try to discern whether or not it’s true.

When the “peripheral” route is engaged, we pay more attention to cues apart from the actual information or content or the message. For example, we might evaluate someone’s argument based on how attractive they are or where they were educated, without considering the actual merits of their message.

When we accept a message through the peripheral route, we tend to be more passive than when we accept a message through the central route. Unfortunately, the peripheral route is more prevalent because we are exposed to an increasingly large amount of information.

The renowned psychologists Susan Fiske and Shelley Taylor have characterized humans as “cognitive misers.” They write, “People are limited in their capacity to process information, so they take shortcuts whenever they can.”

We are lazy creatures who try to expend as little mental energy as possible.

And people are typically less motivated to scrutinize a message if the source is considered to be an expert. We interpret the message through the peripheral route.

This is one reason why media outlets often appoint experts who mirror their political values. These experts lend credibility to the views the outlet espouses. Interestingly, though, expertise appears to influence persuasion only if the individual is identified as an expert before they communicate their message. Research has found that when a person is told the source is an expert after listening to the message, this new information does not increase the person’s likelihood of believing the message.

It works the other way, too. If a person is told that a source is not an expert before the message, the person tends to be more skeptical of the message. If told the source is not an expert after the message, this has no effect on a person’s likelihood of believing the message.

This suggests that knowing a source is an expert reduces our motivation to engage in central processing. We let our guards down.

As motivation and/or ability to process arguments is decreased, peripheral cues become more important for persuasion. Which might not bode well.

However, when we update our beliefs by weighing the actual merits of an argument (central route), our updated beliefs tend to endure and are more robust against counterpersuasion, compared to when we update our beliefs through peripheral processing. If we come to believe something through careful and thoughtful consideration, that belief is more resilient to change.

This means we can be more easily manipulated through the peripheral route. If we are convinced of something via the peripheral route, a manipulator will be more successful at using the peripheral route once again to alter our initial belief.

Social consequences of our beliefs

But why does this matter? Because by understanding how and why we come to hold our beliefs, we can better understand ourselves and guard against manipulation.

The founders of the elaboration likelihood model wrote that, “Ultimately, we suspect that attitudes are seen as correct or proper to the extent that they are viewed as beneficial for the physical or psychological well-being of the person.”

In his book The Social Leap, the evolutionary psychologist William von Hippel writes, “a substantial reason we evolved such large brains is to navigate our social world… A great deal of the value that exists in the social world is created by consensus rather than discovered in an objective sense… our cognitive machinery evolved to be only partially constrained by objective reality.” Our social brains process information not only by examining the facts, but also considering the social consequences of what happens to our reputations if we believe something.

Indeed, in his influential theory of social comparison processes, the eminent psychologist Leon Festinger suggested that people evaluate the “correctness” of their opinions by comparing them to the opinions of others. When we see others hold the same beliefs as us, our own confidence in those beliefs increases. Which is one reason why people are more likely to proselytize beliefs that cannot be verified through empirical means.

In short, people have a mechanism in their minds. It stops them from saying something that could lower their status, even if it’s true. And it propels them to say something that could increase their status, even if it’s false. Sometimes, local norms can push against this tendency. Certain communities (e.g., scientists) can obtain status among their peers for expressing truths. But if the norm is relaxed, people might default to seeking status over truth if status confers the greater reward.

Furthermore, knowing that we could lose status if we don’t believe in something causes us to be more likely to believe in it to guard against that loss. Considerations of what happens to our own reputation guides our beliefs, leading us to adopt a popular view to preserve or enhance our social positions. We implicitly ask ourselves, “What are the social consequences of holding (or not holding) this belief?”

But our reputation isn’t the only thing that matters when considering what to believe. Equally important is the reputation of others. Returning to the peripheral route of persuasion, we decide whether to believe something not only if lots of people believe it, but also if the proponent of the belief is a prestigious person. If lots of people believe something, our likelihood of believing it increases. And if a high-status person believes something, we are more prone to believing it, too.

Prestigious role models

This starts when we are children. In her recent book Cognitive Gadgets, the Oxford psychologist Cecilia Hayes writes, “children show prestige bias; they are more likely to copy a model that adults regard as being higher social status- for example, their head-teacher rather than an equally familiar person of the same age and gender.” Hayes cites a 2013 study by Nicola McGuigan who found that five-year-old children are “selective copiers.” Results showed that kids were more likely to imitate their head-teacher rather than an equally familiar person of the same age and gender. Young children are more likely to imitate a person that adults regard as being higher status.

People in general favor mimicking prestigious people compared to ordinary people. This is why elites have an outsized effect on culture, and why it is important to scrutinize their ideas and opinions. As a descriptive observation, the opinions of my friend who works at McDonald’s have less effect on society than the opinions of my friend who works at McKinsey. If you have any kind of prominence, you unavoidably become a model that others, including children, are more likely to emulate.

Indeed, the Canadian anthropologist Jerome Barkow posits that people across the world view media figures as more prestigious than respected members of their local communities. People on screen appear to be attractive, wealthy, popular, and powerful. Barkow writes, “All over the world, children are learning not from members of their own community but from media figures whom they perceive as prestigious… local prestige is debased.” As this phenomenon continues to grow, the opinions and actions of the globally-prestigious carry even more influence.

Of course, people don’t copy others with high-status solely because they hope that mimicking them will boost their own status. We tend to believe that prestigious people are more competent; prominence is a heuristic for skill.

In a recent paper about prestige-based social learning, researchers Ángel V. Jiménez and Alex Mesoudi wrote that assessing competence directly “may be noisy and costly. Instead, social learners can use short-cuts either by making inferences from the appearance, personality, material possessions, etc. of the models.”

For instance, a military friend of mine used to be a tutor for rich high school students. He himself is not as wealthy as them, and disclosed to me that he paid $200 to replace his old earphones for AirPods. This was so that the kids and their families would believe he is in the same social position as them, and therefore qualified to teach.

Prestige paradox

Which brings us to a question: Who is most susceptible to manipulation via peripheral persuasion? It might seem intuitive to believe that people with less education are more manipulable. But research suggests this may not be true.

High-status people are more preoccupied with how others view them. Which means that educated and/or affluent people may be especially prone to peripheral, as opposed to central, methods of persuasion.

Indeed, the psychology professor Keith Stanovich, discussing his research on “myside bias,” has written, “if you are a person of high intelligence… you will be less likely than the average person to realize you have derived your beliefs from the social groups you belong to and because they fit with your temperament and your innate psychological propensities.”

Students and graduates of top universities are more prone to myside bias. They are more likely to “evaluate evidence, generate evidence, and test hypotheses in a manner biased toward their own prior beliefs, opinions, and attitudes.”

This is not unique to our own time. William Shirer, the American journalist and author of The Rise and Fall of the Third Reich, described his experiences as a war correspondent in Nazi Germany. Shirer wrote, “Often in a German home or office or sometimes in a casual conversation with a stranger in a restaurant, beer hall, or café, I would meet with outlandish assertions from seemingly educated and intelligent persons. It was obvious they were parroting nonsense they heard on the radio or read in the newspapers. Sometimes one was tempted to say as much, but one was met with such incredulity, as if one had blasphemed the Almighty.”

Likewise, in a fascinating study on the collapse of the Soviet Union, researchers have found that university-educated people were two to three times more likely than high school graduates to say they supported the Communist Party. White-collar professional workers were likewise two to three times more supportive of communist ideology, relative to farm laborers and semi-skilled workers.

Educational divides within the US today are consistent with these historical patterns. The Democratic political analyst David Shor has observed that, “Highly educated people tend to have more ideologically coherent and extreme views than working-class ones. We see this in issue polling and ideological self-identification. College-educated voters are way less likely to identify as moderate.”

One possibility for this is that regardless of time or place, affluent members of society are more likely to say the right things to either preserve status or gain more of it. A series of studies by researchers at the University of Queensland found that, “relative to lower-class individuals, upper-class individuals have a greater desire for wealth and status… it is those who have more to start with (i.e., upper-class individuals) who also strive to acquire more wealth and status.”

A more recent set of studies led by Cameron Anderson at the University of Berkeley found that social class, measured in terms of education and income, was positively associated with the desire for social status. People who had more education and money were more likely to agree with statements like “I enjoy having influence over other people’s decision making” and “It would please me to have a position of prestige and social standing.”

Social status loss aversion

Who feels most in danger of losing their reputations, though? Turns out, those same exact people. A survey by the Cato Institute in collaboration with YouGov asked a nationally representative sample of 2,000 Americans various questions about self-censorship.

They found that highly educated people are the most concerned about losing their jobs or missing out on job opportunities because of their political views. Twenty-five percent of those with a high school education or less are afraid of getting fired or hurting their employment prospects because of their political views, compared with 34 percent of college graduates and an astounding 44 percent of people with a postgraduate degree.

Results from a recent paper titled ‘Keeping Your Mouth Shut: Spiraling Self-Censorship in the United States’ by the political scientists James L. Gibson and Joseph L. Sutherland is consistent with the findings from Cato/Yougov. They find that self-censorship has skyrocketed. In the 1950s, at the height of McCarthyism, 13.4 percent of Americans reported that “felt less free to speak their mind than they used to.” In 1987, the figure had reached 20 percent. By 2019, 40 percent of Americans reported that they did not feel free to speak their minds. This isn’t a partisan issue, either. Gibson and Sutherland report that, “The percentage of Democrats who are worried about speaking their mind is just about identical to the percentage of Republicans who self-censor: 39 and 40 percent, respectively.”

The increase is especially pronounced among the educated class. The researchers report, “It is also noteworthy and perhaps unexpected that those who engage in self-censorship are not those with limited political resources… self-censorship is most common among those with the highest levels of education… This finding suggests a social learning process, with those with more education being more cognizant of social norms that discourage the expression of one’s views.”

Highly-educated people appear to be the most likely to express things they don’t necessarily believe for fear of losing their jobs or their reputation. Within the upper class, the true believers set the pace, and those who are loss-averse about their social positions go along with it.

Interestingly, there is suggestive evidence indicating that education is negatively associated with one’s sense of power. That is, the more education someone has, the more likely they are to agree with statements like, “Even if I voice them, my views have little sway” and “My ideas and opinions are often ignored.” Granted, the correlation is quite small (r = -.15). Still, the finding is significant and in the opposite direction of what most people would expect.

Research by Caitlin Drummond and Baruch Fischhoff at Carnegie Mellon University found that people with more education, science education, and science literacy are more polarized in their views about scientific issues depending on their political identity. For example, the people who are most concerned about climate change? College-educated Democrats. The people who are least concerned? College-educated Republicans. In contrast, less educated Democrats and Republicans are not so different from one another in their views about climate change.

Likewise, in an article titled “Academic and Political Elitism,” the sociologist Musa Al-Gharbi has summarized related research, writing, “compared to the general public, cognitively sophisticated voters are much more likely to form their positions on issues based on partisan cues of what they are ‘supposed’ to think in virtue of their identity as Democrats, Republicans, etc.”

High education and low opinions

It’s also useful to understand how highly educated people view others and their social relationships. Consider a paper titled ‘Seeing the Best or Worst in Others: A Measure of Generalized Other-Perceptions’ led by Richard Rau at the University of Münster. Rau and his colleagues were interested in how various factors influence people’s perceptions of others.

In the study, participants looked at social network profiles of people they did not know. They also viewed short video sequences of unfamiliar people describing a neutral personal experience like traveling to work. Researchers then asked participants to evaluate the people in the social media profiles and videos. Participants were asked how much they agreed with statements like “I like this person,” and “This person is cold-hearted.” Then participants responded to various demographic and personality questions about themselves.

Some findings weren’t so surprising. The researchers found, for example, that people who scored highly on the personality traits of openness and agreeableness tended to hold more favorable views of others.

More sobering, though, is that higher education was consistently related to less positive views of other people. In their paper they write, “to understand people’s feelings, behaviors, and social relationships, it is of key importance to know which general view they hold about others… the better people are educated, the less positive their other-perceptions are.”

So affluent people care the most about status, believe they have little power, are afraid of losing their jobs and reputation, and have less favorable views of others.

In short, opinions can confer status regardless of their truth value. And the individuals most likely to express certain opinions in order to preserve or enhance their status are also those who are already on the upper rungs of the social ladder.

There may be unpleasant consequences for this misguided use of intellect and time on the part of highly educated and affluent people. If the most fortunate members of society spend more time speaking in hushed tones, or live in fear of expressing themselves, or are more involved in culture wars, that is less time they could spend using their mental and economic resources to solve serious problems.

Smart people are usually better at finding the truth. But they’re also better at knowing which way the ideological winds are blowing, and thereby producing and accepting absurdities.

==

Explains why so many well-off college students with AirPods, a standard order at Starbucks and an Amazon account pretend to want communism, yet can't survive 5 minutes without Wi-Fi or TikTok.

[raffaellopalandri]

Book of the Day -

Today’s Book of the Day is Thinking, Fast and Slow, written by Daniel Kahneman in 2013 and published by Farrar, Straus and Giroux. Daniel Kahneman is an Israeli-American psychologist whose main research topics have been the psychology of judgment and decision-making, and behavioural economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences (shared with Vernon L.…

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[jackofalllearning]

Subtraction is Addition

Uncover the benifts of subtraction in life and problem solving. Embrace simplicity and overcome mental hurdles. 1. Read this post. 2. Let me know what you think.

I recognize there is a difference between subtracting things from your life that don’t serve you and serious addiction issues. This article’s intention is to explain the former, not the latter. We often struggle to grasp the idea that less is more. We think adding something is the best solution; but what if the key to addition lies in subtraction? Whether it’s cutting down on sugar, reducing…

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[einsteinmarketer]

You're losing Half Your Sales and Leads Without Loss Aversion! (A Marketing Psychology Guide) - Einstein Marketer

Imagine your marketing performance if you weren't losing all those sales and leads. Loss aversion taps into psychology so you leave nothing on the table.

Do you like leaving money on the table❓

Discover the power of loss aversion in marketing, including:

▪️How you can STOP losing sales and leads ▪️Strategies to maximise your digital performance ▪️Everything you need to know about a proven psychological tactic that drives results...🔥🔥🔥

https://www.einsteinmarketer.com/loss-aversion-marketing/

[o-behave]

NUDGES IN THE WILD: VIAGOGO

Jack Duddy, Behavioural Strategist at Ogilvy Change

I took this screen shot a few months ago when I was on Viagogo buying tickets. Within this one screenshot I can personally identify a combination of nudges being applied to make me follow through with my purchase -  so let’s start by listing them off from the top of the screen. “These tickets will no longer be reserved in…”  - Scarcity and Loss Aversion– having a countdown clock massively increases the urgency for people to stick with their commitment to buying the tickets and follow through with the purchase through Scarcity of Time. Also, emphasising that I will no longer have the tickets triggers me to be loss-aversive and retain MY tickets.

“These are the last tickets available at this price” – Scarcity again – Showing that I have reserved some of the last tickets at this price subconsciously increases my value of the tickets.

“1 other person have waited to view these tickets” – Social Norms – I barely understand this sentence and one other person isn’t that many, however by simply inferring that there are others looking at the same tickets makes me want to snatch the tickets from them. Interestingly, I would say this nudge was the most influential in making me carry through with my purchase.

“You’re awesome Jack” – This is not so much a “Nudge” but a completely true statement... however I would say they nudge here using Ego Inflation which is then followed through with language such as “Our warm welcome” which is using Affective language that evokes an emotion of a warm, fuzzy feeling.

“Our tickets are 100% guaranteed” – Uncertainty Aversion/ Regret Aversion - This use of language is important in this context. When buying tickets a huge fear is that they won’t turn up on time after months of waiting for the big day. This simple collection of sentences calms these fears and makes me believe that Viagogo are to be trusted with my precious tickets.

These are the Nudges I can identify within this page, if you have any challenges or addition please leave a comment. Now I will also say that this was just ONE page of the entire ticket-buying process. Each page was littered with Nudges such as countdown clocks, watching eyes and pricing architecture. This made buying these tickets an incredibly anxiety-inducing thing to do – as is the trend for many ticket websites and Hotel booking sites (I’m looking at you Booking.com). However, the reward for completing the process and achieving the purchase almost makes the process worth it. Not to mention the relief of not having nudges machine-gunned in your general direction. Opening this topic up for discussion, do you like the direction of having multiple nudges baked into each layer of a booking experience or not? 95% of readers leave a comment and share this blog…   …sorry.

 P.S. I was only buying one ticket and I went by myself… it was awesome.

[jonnysofa]

The Status Quo Is Not Neutral

Here's something worth considering: choosing not to change is still a choice.

And....

It has a cost!

Loss aversion makes inaction feel safe.

But the status quo is rarely truly neutral, it's usually a slow bleed in some direction.

The job that isn't working costs you a little more energy each week.

The habit you haven't changed compounds quietly.

The question isn't "what will I lose if I change?" It's "what am I already losing by staying?"

Hope you got some value from this post.

Till next time,

Jonny.

` #mindset #psychology #loss aversion #self improvement #behavioral psychology #decision making #human behavior #habits #change