Tag: Availability Bias

Why First Impressions Don’t Matter Much For Experiences

A recent article in the WSJ, “Hidden Ways Hotels Court Guests Faster”, focused on how hotels are trying to dazzle guests with first impressions.

Jeremy McCarthy, a hotel executive, argues this is why “upon arriving to a luxury hotel, you are often greeted in the lobby by a friendly face, an offer to assist with your luggage, and sometimes a welcome beverage or a refreshing chilled towel to help wipe away the stress of travel.”

Research, however, seems to show that, while we remember people by first impressions, we don’t really remember experiences the same way. With experiences, we seem to remember the peak moments and how they end. McCarthy writes:

An example of the research that supports this “peak-end” theory, is the work on colonoscopy patients done by psychologist Daniel Kahneman. Kahneman found that after a painful colonoscopy treatment, patients would forget about the overall duration of the pain they experienced and would instead remember their experience based on the peak moments of pain and on how it ended.

A patient whose colonoscopy lasted an agonizing 25 minutes, for example (Patient B), would rate the experience better and would happily come back a year later for his follow-up appointment, as long as the treatment ended with less pain. Another patient (Patient A), who only had around 8 minutes of total pain, wouldn’t come back next year because he remembers the pain of how the experience ended.

The implications of this are pretty clear. If you run a hotel, for example, you want to focus more on the departure than the arrival.

I’m left with more questions about this research than answers, so if you know of any good books/blogs/articles on this please pass them along.

How Infomercials Persuade

In response to But Wait … There’s More, a kind reader passed along a link to a wonderful interview between Andrew Warner and Tim Hawthorne (a producer of infomercials).

On how to orchestrate an immediate response:

..In order to do that, I think there are definitely certain products that fall into a category of generating immediate response. That’s why we say in direct response television that product is king. It would be difficult for us to sell, for example, an automobile with one click. Where by having someone call an 800 number, if you can get somebody to call a 800 number or to click for more information about a considered purchase, like an automobile, a washer/dryer, something of that sort. In order to get somebody to respond immediately, it has to fall into some categories that we would consider to be appropriate for immediate response. That’s why we say product is king. These particular categories tend to fall, in direct response television, I think there’s some similarities on the Internet, into categories such as fitness, beauty, diet, business opportunities, kitchen and home appliances, and things of this sort which are easily demonstrable and within a price range where an immediate response is very possible. Priced anywhere from $9.95 to let’s say $495. This is the price category and these are the product categories that seem to appeal mostly to people to make that immediate response, which is what we’re looking for in direct marketing.

Along with that, you’re looking at products that do appeal to certain key parts of needs of human beings. Among those are a need for love, a need for security, a need for acquisition or wealth, a need for pleasure. We can also take a look at products and see how they might be in terms of appealing to solving fears that people have or satisfying greed which is again acquisition or wealth. Also, products that somehow tap into guilt or exclusivity, the one-of-a-kind type of thing and those that build ego. When it comes to a product, people in direct response television, they can take a look at a product. They can see if it’s simple, if it solves a common problem, if it appeals to one of these very instrumental aspects of human nature. If it doesn’t, then it’s not going to be something that we would recommend anybody try in direct response television, and it’s probably not going to work on the Internet either.

Creating urgency

…Well, I think the first and foremost way to do it is to really define what we call “the big promise.” The big promise is, essentially, one line that you’re going to be putting out as your headline, somewhere, if it’s a video, somewhere within the first 5 to 60 seconds, as to what your product ultimately can do for an individual. The big promise and how it’s crafted is probably the most important thing you need to do creatively in putting together your commercial or your ad.

I’ll give you an example. We did a product for a client a number of years ago, which was a patterned, multi or dual roller, painting device. It was alike a roller paint device except it had a pattern and there were two different rollers on a stem so that you could actually create these patterns on a wall like faux painting, as they called it. It was called Wall Magic. What we determined was that this particular product was going to be excellent for people that really wanted to have a different look on their walls other than a flat painted wall and people that found it dreary and drudgery to paint any wall. We came up with what we thought was a big promise that would be effective. Here’s the big promise. Transform anyone’s home or apartment from ordinary to extraordinary in just minutes. What we tried to do here was to move beyond just the fact that you can paint something that’s pretty on your walls quickly and create a line that was going to appeal to people and their dreams of creating a home that’s much more beautiful than they’ve ever had in the past. They aren’t going to have spend a lot time and sweat about it. Transform anyone’s home or apartment from ordinary to extraordinary in just minutes. The big promise. That could be a headline. That could be a subject line of an e-mail. The big promise in crafting exactly what your product can do, the ultimate benefit that provides, is probably the most important thing in terms of creating an urgency to buy.

On talent

…I think that after the product, and if you’re doing a television commercial, after the product, the talent becomes actually the next most important factor of success. By talent, I’m talking about the presenter or the celebrity. You really don’t have that equivalence, I think, certainly in display advertising or any kind of text advertising on the Internet. In video, talent becomes really critical to the success, and we can talk a little bit more about that later.

On generating an immediate reponse:

…Creating an irresistible offer comes down to actually understanding some of the basic needs of an individual. Among those needs are, is that everybody wants a deal. Everybody wants to get something with dollars off. Everybody wants to get it quickly. Everybody likes to get more and more. These are some of the basic aspects of human nature. So, we try to appeal to individuals by structuring an offer that’s actually going to hone in on these aspects. Among those aspects is we’re going to be trying to add bonuses and premiums and discounts and coupons. Let me give you some examples of successful direct response television offers and many of these you’ve seen. You’ve seen not only in direct response but in print advertisings. In print advertisements, you have seen them on the Internet.

Here’s some of the basics. Buy one get one free, or get the second one at half price. So you’re getting an immediate discount. Buy one and get a second one super size, so you’re actually doubling or tripling the order. Buy one and the second is actually going to be double the size. Drop a payment. Let’s say that your offer is three payments of $19.95, that’s your initial offer. But wait, if you call now, if you order now, we’ll actually make one payment for you. So it’s only two payments of $19.95. So that’s drop a payment.

The $9.95 trial offer is something that’s worked very well for people in direct response for the last 10 or 15 years. That is for a product that’s going to be much more expensive than $9.95. Maybe $49.95, $99.95, $199.95, but you can try it now for only $9.95 or for the cost of shipping and handling. In that particular case, vendors obviously taking a risk. You’re only collecting $9.95, and you’re shipping the product to the individual. They are essentially required to return the product to you within 30 days or you will hit their credit card for the full price. Of course, they understand this when they call in or when they actually go to the website and actually affect the order. They understand that if they don’t return the product within 30 days they’ll be paying the full amount or they’ll be paying multiple payments after that 30 days. But a $9.95 trial offer, what a superb way to get people to just try your product for less than $10.

…Dollars off, you can say that it’s $99.95, but for the next 30 days 30% off or $30 off. Discounting immediately becomes very powerful too. Those are some examples of how to create an irresistible offer. One note that I should make here is that if you’re doing something in video and the process that you’re taking people through is linear in time, you actually build the offer over a period of one, two, three minutes. You provide the initial offer. Perhaps it’s $99.95 and you’re going to get A, B, and C. A minute later you say but if you call now we’re also going to give you premiums D and E. Oh, by the way, if you use your credit card, we’re also going to give you free shipping and at the very end, we’re also going to give you a free gift, which if you return the product, the gift is yours to keep. Just our saying thanks for you trying the product. You can see that over the period of two to three minutes we can actually build this offer with a number of different levels, providing the core offer with the high price, then additional bonuses, then potentially reducing the price instead of three pay of $33.33, it’s now going to be two pay of $33.33. Adding more bonuses, giving free shipping. So going through a process of actually building what we call a Christmas tree offer. By adding more and more that a person’s going to get makes it very enticing and irresistible, I think, as you can see

On the magical transformation

I’ll give you kind of a classic example of what we mean by magical transformation, and that’s in a diet show. Everybody’s familiar with, Nutrisystem, I guess. It could be long form or it could be short form. The before and after is somebody before they lost the weight and after they lost the weight. You will always see those images side by side eventually. It might be a full screen image, initially of the person before they lost the weight, squeeze it back, bring up the image of the person after they’ve lost the weight. They’ve lost 30 pounds. They’ve lost 50, 60 pounds. That’s a before and that’s an after. That’s what we call the magical transformation. Magical transformation is in essence how to showcase what your product can do for somebody. In other words, how is your product going to transform my life? Of course, if it’s a diet product, it’s going to transform me magically from being an overweight person to being a fit person. If it’s an exercise product, it’s is going to be the same way.

…Virtually in every infomercial, every direct response commercial you see, you look for the magical transformation and how it’s executed because it’s probably, it’s the thing that grabs people the most emotionally. How is the product going to transform my life?

For example, going back to vacuum cleaners which are very basic, it’s throwing a lot of stuff on the floor. You have a dirty floor, take your vacuum, one swipe across the floor and everything is cleaned up. Where that vacuum swiped, everything else is still dirty.

Magical Phrases

… One of the ways to do that is to first be aware of some of the words that are very powerful in direct marketing. I’ll give you a list of some of these. As I mentioned, “free” is still, I think, and will always be considered the most powerful word in selling. After that we would probably think of words such as now, you or your, easy, easily, guarantee, break-through, revolutionary, fast, quick, instant, magic, new, special, exclusive, limited time, risk free, only, save, money back, money back guarantee, call now, and in terms of a classic phrase, “but wait, there’s more.

Everybody kinds of kicks around that particular phrase and it’s used often. One of the reasons it’s used so often is that it’s so effective. … So here are some additional phrases. “This offer couldn’t possibly get better, or could it?” “But hold on, we’re not done yet.” “We know you’ll love.” “Call or log on now.” “You’re going to love this.” “And that’s not all.” “Call right now and you’ll also receive an additional free bonus.” “But hold on, I’m just getting warmed up.” “What could you possibly be waiting for?” Let’s see what else I can find here. “This is an unbeatable price.” “You don’t want to miss out on this one.” “What are you waiting for?” “This is an absolutely incredible deal, and you won’t find it anywhere else.” “If you aren’t completely satisfied, just return it for a complete refund. No questions asked.” Which is a classic phrase in direct response television, asking no questions is really critical. You don’t want to confront somebody when they’re returning something.

The real classic, I think, also is, “If you don’t like it, we’ll buy it back.”

The hard sell

The fact is, is that if you want to sell directly and you want to sell immediately, the hard sell always works best. There is no doubt in any direct marketer’s mind. As much as we would love to be selling soft, because nobody likes to be sold the hard sell which is telling people what you’re going to get, telling them what the product is going to do for you and telling it to them directly, there’s nothing that’s going to make the phone ring or people click and order more than the hard sell.

Is there anything else that you think is important?

I think that there are a lot of different things that are necessary, I think, to understand about great selling. There are some books which I probably would recommend …Books that people should buy to understand the basics of strong direct marketing and how to really sell on the Internet or on television.

Tim reccommends the following books:

Winning Direct Response Advertising, by Joan Throckmorton

Television Secrets for Marketing Success, by Joseph Sugarman

The Salesman of the Century, by Ron Popeil

The Wisdom of Ginsu, by Barry Becher & Edward Valenti

Or Your Money Back, by Alvin Eicoff

As Seen On TV, by Lou Harry and Sam Stall

But, Wait! There’s More!, by Timothy Samuelson

Triggers – 30 Sales Tools You Can Use to Control the Mind of Your Prospect, by Joseph Sugarman

Advertising Secrets of the Written Word, by Joseph Sugarman

How to Say It to Sell it, by Sue Hershkowitz-Coore

The Advertised Mind, by Erik Du Plessis

Advertising That Sells, by Miner Raymond

Whatever It Takes, by Avi Sivan

Winking at Life, by Wink Martindale

How To Win Customers & Keep Them for Life, by Michael LeBoeuf, Ph.D

Being Direct, by Lester Wunderman

All Marketers Are Liars, by Seth Godin

But Wait … There’s More!, by Remy Stern

Conceptual Selling, by Robert B. Miller & Stephen E. Heiman

How to Say It to Sell it, by Rosalie Maggio

Phrases That Sell, by Edward Werz & Sally Germain

Words That Sell, by Richard Bayan

More Words That Sell, by Richard Bayan

The Copywriter’s Handbook, by Robert W. Bly

Act Now! How I Turn Ideas Into Million-Dollar Products, by Kevin Harrington

How to Write Advertising That Sells, by Clyde Bedell

An Incredible Offer — But Wait…There’s More

You’ll never look at infomercials the same after reading this post.

Robert Cialdini calls But Wait…There’s More “A wholly fascinating account of a wholly fascinating industry.” If you’re interested in how late night TV infomercials use every psychology trick in the book, you need to read this.

Infomercials are powerful. A thirty-second commercial for Tide doesn’t ask you to do anything. The goal is for you to think about Tide and to associate it with something happy and clean so you’ll pick it up the next time you need washing detergent.

An infomercial, however, requires you take immediate action. One moment you’re sitting on the couch eating potato chips, the next you’ve decided there is really nothing you’d rather have than an ab-machine. How does that happen?

Everything about an infomercial is tested — Whether it’s the price, the number of freebies, the background music, or even the color of the model’s hair — with the sole goal of selling more product. Nothing is left to chance.

Along the way infomercial marketers have picked up an amazing amount of knowledge about how we behave as shoppers and what motivates us to make a purchase.

What can you learn from Ron Popeil, the master infomercial seller?

All the time-tested strategies were on display: he offered bonuses or freebies as incentives, and heightened tensions by warning people that he only had a certain number of units on hand (“supplies are limited!”). He assigned numbers to his customers—”You’re number eight, you’re number nine,” and so on—which gave them the impression that you had to get in line to take advantage of the great deal he was offering up. He employed the classic countdown technique, where he systematically lowered the price as he neared the end of the pitch. and when he was at the very end and started accepting cash, he avoided selling the item to the last batch of eager customers, instead launching into a fresh pitch. To get new people to come over and watch a demonstration, it requires that other people be standing in rapt attention. “Wait, there’s something else i want to show you before you take this home with you,” he might say.

Why does that steak knife cut through a shoe?

Perceived value also comes into play when a demonstrator slices a knife through an old shoe or cement block or uses a pair of shears to cut through a penny. Why would you need your steak knife to cut through a hammer, you ask? You wouldn’t. But in addition to proving to you that the knife is indestructible, it’s raising the perceived value of the product. Somewhere in the recesses of your subconscious, your brain is telling you that if for whatever reason you wanted to cut through a boot, you can rest assured that you have the knife that’s up to the task.

On marketing late at night

One of the early discoveries of infomercials was that they perform better when they were marketed late at night. “Airtime was cheaper, too,” but “viewers defenses started to topple as they grew sleepy.” Boredom also played a role. “When he placed sixty-second commercials during a hit show, the responses were unimpressive. When the programming was lousy, many more people purchased products.”

Reciprocation

“He threw in giveaway after giveaway. He suggested that he would only offer the Dehydrator at such a reasonable price point to people who promised to “tell a friend” about the incredible offer—a classic tactic designed to make the audience feel indebted to him for his act of generosity, which, naturally, they could reciprocate by making a purchase.”

What do infomercials sell?

…What all of these half-hour infomercials have in common, of course, is that they all offer some sort of cure. Late-night pitches aren’t in the business of offering us dresses, trash cans, CD players,or cans of roach spray. They’re in the business of presenting serious problems—and providing us with quick, easy, painless solutions. That blender isn’t just designed to make smoothies. It’s going to save you precious minutes everyday and give you more time with your loved ones. Don’t you want to be a decent human being and spend more time with your family?

There’s a good reason products advertised on infomercials are tied to our emotional well-being, our self-image, and our relationships with others. It gives us a powerful reason to pick up the phone and place an order.

Sex

One of the biggest problems with long-form shows is getting people to stop their channel changing long enough to tune in … A half-hour show requires you to bypass that episode of Cops, rerun of Seinfeld, … and actively watch someone try to sell you something you probably don’t need. That’s why many infomercials have some sort of hook, something that momentarily distracts views and gets them to move their finger off the up/down dial on their remote control.

Sex usually works. What buying real estate has to do with women with big boobs is unclear, but moneymaking products have long features cleavage-bearing babes.

Repetition

Research has demonstrated that subtle repetition is highly effective. In fact, studies have shown that because infomercials expose viewers to the sales message for an extended period of time and do not repeat the same message but go back and rehash the same material while making small changes to the script, the repetition is actually much more powerful.

On manufacturing pricing complexity

Infomercials thrive on complicating purchasing decisions for consumers by bundling items with free offers, bonuses, and rewards. A “but wait, there’s more!” suddenly muddles our perceptions and makes it harder to judge the offer that’s just been presented to us.

What about shipping and handling?

Cleverly, shipping and handling costs are often concealed from viewers until they call. … by the time you learn the amount, you’ve already made the mental decision to buy the toaster oven, you called the 800 number, and you’ve just spent five minutes on the phone placing your order. Are you going to hang up because the shipping was a few $ more than you anticipated?

What’s the deal with the host?

What’s most important is that the host communicates authority. It doesn’t have to be real authority, mind you. Just as TV doctors are used to pitch health-related products, it’s merely the perception of authority that matters most. Clothes matter. … A host with an accent isn’t accidental: Americans perceive English accents as more authoritative … Once you find a host for a show, the time-tested formula often requires the presence of a lackey, someone to play off against the pitchman. This is yet another form of social proof.

Wording matters

And every word counts: Greg Renker pointed out that his infomercials always say “when you call,” not “if you call.” The nuance matters. It suggests the viewer will call—it’s merely a matter of time. … Ever hear the line “if the lines are busy, please call back?” … the mere suggestion of a rush of callers sends people scurrying to the phone.

When you think about it, every element of an infomercial is designed to manipulate you into taking action.

But Wait… There’s More. Much More. For the next 15 minutes, Amazon.com is offering an irresistible special price on But Wait … There’s More!. Buy it. Read it.

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Still curious? Try How Infomercials Persuade.

 

Two Questions Everyone Asks Themselves When They Meet You

People everywhere differentiate each other by liking (warmth, trustworthiness) and by respecting (competence, efficiency).

Essentially they ask themselves: (1) Is this person warm? and (2) Is this person competent?

The “warmth dimension captures traits that are related to perceived intent, including friendliness, helpfulness, sincerity, trustworthiness and morality, whereas the competence dimension reflects traits that are related to perceived ability, including intelligence, skill, creativity and efficacy.”

“In sum, although both dimensions are fundamental to social perception, warmth judgments seem to be primary, which reflects the importance of assessing other people’s intentions before determining their ability to carry out those intentions.”

Like all perception, social perception reflects evolutionary pressures. In encounters with conspecifics, social animals must determine, immediately, whether the ‘other’ is friend or foe (i.e. intends good or ill) and, then, whether the ‘other’ has the ability to enact those intentions. New data confirm these two universal dimensions of social cognition: warmth and competence. Promoting survival, these dimensions provide fundamental social structural answers about competition and status. People perceived as warm and competent elicit uniformly positive emotions and behavior, whereas those perceived as lacking warmth and competence elicit uniform negativity. People classified as high on one dimension and low on the other elicit predictable, ambivalent affective and behavioral reactions. These universal dimensions explain both interpersonal and intergroup social cognition.

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The Planning Fallacy

David Books, author of The Social Animal, with an excellent column on the planning fallacy:

In his forthcoming book (now released), Thinking, Fast and Slow, Kahneman calls this the planning fallacy. Most people overrate their own abilities and exaggerate their capacity to shape the future. That’s fine. Optimistic people rise in this world. The problem comes when these optimists don’t look at themselves objectively from the outside.

The planning fallacy is failing to think realistically about where you fit in the distribution of people like you. As Kahneman puts it, “People who have information about an individual case rarely feel the need to know the statistics of the class to which the case belongs.”

Over the past three years, the United States has been committing the planning fallacy on stilts. The world economy has been slammed by a financial crisis. Countries that are afflicted with these crises typically experience several years of high unemployment. They go deep into debt to end the stagnation, but the turnaround takes a while.

This historical pattern has been universally acknowledged and universally ignored. Instead, leaders in both parties have clung to the analogy that the economy is like a sick patient who can be healed by the right treatment.

3 Things Everyone Should Know About the Availability Heuristic

There are 3 things you should know about the availability heuristic:

  1. We often misjudge the frequency and magnitude of events that have happened recently.
  2. This happens, in part, because of the limitations on memory.
  3. We remember things better when they come in a vivid narrative.

***

There are two biases emanating from the availability heuristic (a.k.a. the availability bias): Ease of recall and retrievability.

Because of the availability bias, our perceptions of risk may be in error and we might worry about the wrong risks. This can have disastrous impacts.

Ease of recall suggests that if something is more easily recalled in memory it must occur with a higher probability.

The availability heuristic distorts our understanding of real risks.

“The attention which we lend to an experience is proportional to its vivid or interesting character; and it is a notorious fact that what interests us most vividly at the time is, other things equal, what we remember best.”

— William James

When we make decisions we tend to be swayed by what we remember. What we remember is influenced by many things including beliefs, expectations, emotions, and feelings as well as things like frequency of exposure.  Media coverage (e.g., Internet, radio, television) makes a big difference. When rare events occur they become very visible to us as they receive heavy coverage by the media. This means we are more likely to recall it, especially in the immediate aftermath of the event. However, recalling an event and estimating its real probability are two different things. If you’re in a car accident, for example, you are likely to rate the odds of getting into another car accident much higher than base rates would indicate.

Retrievability suggests that we are biased in assessments of frequency in part because of our memory structure limitations and our search mechanisms. It’s the way we remember that matters.

The retrievability and ease of recall biases indicate that the availability bias can substantially and unconsciously influence our judgment. We too easily assume that our recollections are representative and true and discount events that are outside of our immediate memory.

***

In Thinking Fast and Slow, Kahneman writes:

People tend to assess the relative importance of issues by the ease with which they are retrieved from memory—and this is largely determined by the extent of coverage in the media.

***

Nobel Prize winning Social Scientist and Father of Artificial Intelligence, Herbert Simon, wrote in Models of My life:

I soon learned that one wins awards mainly for winning awards: an example of what Bob Merton calls the Matthew Effect. It is akin also to the phenomenon known in politics as “availability,” or name recognition. Once one becomes sufficiently well known, one’s name surfaces automatically as soon as an award committee assembles.

* * *

According to Harvard professor Max Bazerman

Many life decisions are affected by the vividness of information. Although most people recognize that AIDS is a devastating disease, many individuals ignore clear data about how to avoid contracting AIDS. In the fall of 1991, however, sexual behavior in Dallas was dramatically affected by one vivid piece of data that may or may not have been true. In a chilling interview, a Dallas woman calling herself C.J. claimed she had AIDS and was trying to spread the disease out of revenge against the man who had infected her. After this vivid interview made the local news, attendance at Dallas AIDS seminary increased dramatically. Although C.J.’s possible actions were a legitimate cause for concern, it is clear that most of the health risks related to AIDS are not a result of one woman’s actions. There are many more important reasons to be concerned about AIDS. However, C.J.’s vivid report had a more substantial effect on many people’s behavior than the mountains of data available. The Availability Heuristic describes the inferences we make about even commonness based on the ease with which we can remember instances of that event

While this example of vividness may seem fairly benign, it is not difficult to see how the availability bias could lead managers to make potentially destructive workplace decisions. The following came from the experience of one of our MBA students: As a purchasing agent, he had to select one of several possible suppliers. He chose the firm with whose name was the most familiar to him. He later found out that the salience of the name resulted from recent adverse publicity concerning the firm’s extortion of funds from client companies!

Managers conducting performance appraisals often fall victim to the availability heuristic. Working from memory, vivid instances of an employee’s behavior (either positive or negative) will be most easily recalled from memory, will appear more numerous than commonplace incidents, and will therefore be weighted more heavily in the performance appraisals. The recency of events is also a factor: Managers give more weight to performance during the three months prior to the evaluation than to the previous nine months of the evaluation period because it is more available in memory.

* * *

There are numerous implications for availability bias for investors.

A study by Karlsson, Loewenstein, and Ariely (2008) showed that people are more likely to purchase insurance to protect themselves after a natural disaster they have just experienced than they are to purchase insurance on this type of disaster before it happens.

Bazerman adds:

This pattern may be sensible for some types of risks. After all, the experience of surviving a hurricane may offer solid evidence that your property is more vulnerable to hurricanes than you had thought or that climate change is increasing your vulnerability to hurricanes.

Robyn M. Dawes, in his book Everyday Irrationality, says:

What is a little less obvious is that people can make judgments of the ease with which instances can come to mind without actually recalling specific instances. We know, for example, whether we can recall the presidents of the United States–or rather how well we can recall their names; moreover, we know at which periods of history we are better at recalling them than at which other periods. We can make judgments without actually listing in our minds the names of the specific presidents.

This recall of ease of creating instances is not limited to actual experience, but extends to hypothetical experience as well. For example, subjects are asked to consider how many subcommittees of two people can be formed from a committee of eight, and either the same or other subjects are asked to estimate how many subcommittees of six can be formed from a committee of eight people. It is much easier to think about pairs of people than to think about sets of six people, with the result that the estimate of pairs tends to be much higher than the estimate of subsets of six. In point of logic, however, the number of subsets of two is identical that of six; the formation of a particular subset of two people automatically involves the formation of a particular subset consisting of the remaining six. Because these unique subsets are paired together, there are the same number of each.

This availability to the imagination also creates a particularly striking irrationality, which can be termed with the conjunction fallacy or compound probability fallacy. Often combinations of events or entities are easier to think about than their components, because the combination might make sense whereas the individual component does not. A classic example is that of a hypothetical woman names Linda who is said to have been a social activist majoring in philosophy as a college undergraduate. What is the probability that at age thirty she is a bank teller? Subjects judge the probability as very unlikely. But when asked whether she might be a bank teller active in a feminist movement, subjects judge this combination to be more likely than for her to be a bank teller.

* * *

Retrievability (based on memory structures)

We are better at retrieving words from memory using the word’s initial letter than a random position like 3 (Tversky & Kahneman, 1973).

In 1984 Tverksy and Kahneman demonstrated the retrievability bias again when they asked participants in their study to estimate the frequency of seven-letter words that had the letter “n” in the sixth position. Their participants estimated such words to be less common than seven letter words ending in the more memorable “ing”. This response is incorrect. All seven letter words ending with “ing” also have an “n” in the sixth position. However, it’s easy to recall seven letter words ending with ing. As we demonstrated with Dawes above, this is another example of the conjunction fallacy.

Retail locations are chosen based on search as well, which explains why gas stations and retail stores are often “clumped” together. Consumers learn the location of a product and organize their mind accordingly. While you may not remember the name of all three gas stations on the same corner, your mind tells you that is where to go to find gas. Each station, assuming all else equal, then has a 1/3 shot at your business which is much better than gas stations you don’t visit because their location doesn’t resonate with your minds search. In order to maximize traffic stores must find locations that consumers associate with a product.

* * *

Exposure Effect

People tend to develop a preference for things because they are familiar with them. This is called the exposure effect. According to Titchener (1910) the exposure effect leads people to experience a “glow or warmth, a sense of ownership, a feeling of intimacy.”

The exposure effect applies only to things that are perceived as neutral to positive. If you are repeatedly exposed to something perceived as a negative stimuli it may in fact amplify negative feelings. For example, when someone is playing loud music you tend to have a lot of patience at first. However, as time goes on you get increasingly aggravated as your exposure to the stimuli increases.

The more we are exposed to something the easier it is to recall in our minds. The exposure effect influences us in many ways. Think about brands, stocks, songs, companies, and even the old saying “the devil you know.”

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The Von Restorff Effect

“One of these things doesn’t belong,” can accurately summarize the Von Restorff Effect (also known as the isolation effect and novelty effect). In our minds, things that stand out are more likely to be remembered and recalled because we give increased attention to distinctive items in a set.

For example, if I asked you to remember the following sequence of characters “RTASDT9RTGS” I suspect the most common character remembered would be the “9” because it stands out and thus your mind gives it more attention.

The Von Restorff Effect leads us to Vivid evidence.

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Vivid Evidence

According to William James in the Principles of Psychology:

An impression may be so exciting emotionally as to almost leave a scar upon the cerebral tissues; and thus originates a pathological delusion. For example “A woman attacked by robbers takes all the men whom she sees, even her own son, for brigands bent on killing her. Another woman sees her child run over by a horse; no amount of reasoning, not even the sight of the living child, will persuade her that he is not killed.

M. Taine wrote:

If we compare different sensations, images, or ideas, we find that their aptitudes for revival are not equal. A large number of them are obliterated, and never reappear throughout life; for instance, I drove through Paris a day or two ago, and though I saw plainly some sixty or eighty new faces, I cannot now recall any one of them; some extraordinary circumstance, a fit of delirium, or the excitement of hashish would be necessary to give me a chance at revival. On the other hand, there are sensations with a force of revival which nothing destroys or decreases. Though, as a rule, time weakens and impairs our strongest sensations, these reappear entire and intense, without having lost a particle of their detail, or any degree of their force. M. Breirre de Boismont, having suffered when a child from a disease of the scalp, asserts that ‘after fifty-five years have elapsed he can still feel his hair pulled out under the treatment of the ‘skull-cap.’–For my own part, after thirty years, I remember feature for feature the appearance of the theater to which I was taken for the first time. From the third row of boxes, the body of the theater appeared to me an immense well, red and flaming, swarming with heads; below, on the right, on a narrow floor, two men and a woman entered, went out, and re-entered, made gestures, and seemed to me like lively dwarfs: to my great surprise one of these dwarfs fell on his knees, kissed the lady’s hand, then hid behind a screen: the other, who was coming in, seemed angry, and raised his arm. I was then seven, I could understand nothing of what was going on; but the well of crimson velvet was so crowded, and bright, that after a quarter of an hour i was, as it were, intoxicated, and fell asleep.

Every one of us may find similar recollections in his memory, and may distinguish them in a common character. The primitive impression has been accompanied by an extraordinary degree of attention, either as being horrible or delightful, or as being new, surprising, and out of proportion to the ordinary run of life; this it is we express by saying that we have been strongly impressed; that we were absorbed, that we could not think of anything else; that our other sensations were effaced; that we were pursued all the next day by the resulting image; that it beset us, that we could not drive it away; that all distractions were feeble beside it. It is by force of this disproportion that impressions of childhood are so persistent; the mind being quite fresh, ordinary objects and events are surprising…

Whatever may be the kind of attention, voluntary or involuntary, it always acts alike; the image of an object or event is capable of revival, and of complete revival, in proportion to the degree of attention with which we have considered the object or event. We put this rule into practice at every moment in ordinary life.

An example from Freeman Dyson:

A striking example of availability bias is the fact that sharks save the lives of swimmers. Careful analysis of deaths in the ocean near San Diego shows that on average, the death of each swimmer killed by a shark saves the lives of ten others. Every time a swimmer is killed, the number of deaths by drowning goes down for a few years and then returns to the normal level. The effect occurs because reports of death by shark attack are remembered more vividly than reports of drownings.

Availability Bias is a Mental Model in the Farnam Street Mental Model Index