Why we buy: 5 thinking errors companies exploit to make you shop

The Queen of Christmas, Mariah Carey, has declared “It’s time!!!!”, which can only mean one thing: the holiday season is officially upon us, with all the extra spending that entails.

If past years are anything to go by, I suspect that many of my impulse purchases will spark more guilt than joy, as they gather dust in the corners of my home. So, I was extremely interested to read a copy of Influenced: The science of why we buy by Aarron Atkinson-Toal, published last week.

An assistant professor in marketing at Durham University in the UK, Atkinson-Toal has spent much of his career studying the forces that influence consumer decision-making. Like many before him, he argues that our judgements are often driven by cognitive shortcuts called heuristics that help the brain to appraise a situation without consciously deliberating over every piece of data it receives.

The late Nobel prizewinning psychologist Daniel Kahneman described this intuitive thinking as System 1, as opposed to the conscious, careful calculations of System 2. Leaning on System 1 can save us a lot of time and effort in the information overload of daily life. Unfortunately, this efficiency comes at the cost of accuracy and logic, since it can be easily swayed by our emotions and tends to bypass our self-control.

“It is believed that up to 95 per cent of daily decisions are made in this subconscious and reactive way,” writes Atkinson-Toal. “That is a lot of decisions being made without full awareness of actions and consequences.”

In Influenced, he sets out the many ways that marketing schemes have been designed to exploit this – and highlights some of the most important errors that may influence our shopping – and describes our feelings after we have made our purchases.

Urgency effects

In the run-up to Black Friday, we’ll see many time-limited deals that promise huge savings. When we are rushed, we are especially likely to fall into System 1 thinking, as we prioritise speed over accuracy.

Imagine you see a new phone, discounted from £1000 to £800. Under time pressure, you will be more easily swayed by your fear of regret for missing out on the bargain, since you know that you can save £200 if you buy it now. If you had more time to decide, however, you might conclude that £800 is still too much to spend for a relatively minor upgrade.

Devices like countdown timers on online retailers’ websites when you put something in your virtual cart “are attempts to make the fast decision-making process of shoppers even faster,” writes Atkinson-Toal.

Scarcity effects

To make matters worse, these limited-time offers promote the idea of scarcity, which we tend to associate with a higher value, leading us to believe that we’re getting a better deal, argues Atkinson-Toal.

In one classic experiment, Stephen Worchel, then at the University of Virginia, and his colleagues asked participants to test various goods in the lab, including a jar of cookies. The scientists found that the participants gave consistently higher ratings if there were only two cookies in the jar, compared with 10 – even though the cookies were identical in each condition. The effect was even greater if the participants were told that the cookies were running low due to high demand from other students.

When you see a “low stock alert” on a website, or an emptying shelf in a physical shop, you are primed to make a similar judgement – compelling you to buy the product.

Anchoring and adjustment

The anchoring effect was one of the first cognitive biases that Kahneman and his colleague the late Amos Tversky documented. In one study, they asked participants to spin a “wheel of fortune” containing the numbers 0 to 100 before estimating the percentage of African countries in the UN. They found that the random number chosen by the wheel of fortune “anchored” the participants’ answers: the higher the random number, the bigger their estimate.

Anchoring is prevalent in sales. If you are first recommended a high-priced product, you will be more inclined to pay more for whatever you finally choose to buy, because the luxury good has anchored your judgement of what is reasonable.

Temporal discounting and affective forecasting

Despite our amazing capacity for mental time travel, we tend to be pretty poor at estimating how decisions today will affect our feelings in the future. We prioritise immediate rewards over our future wellbeing, a habit known as temporal discounting. We also struggle to predict how we will feel about future stresses, which are known as errors in affective forecasting.

Imagine you have been putting money aside for a trip next year. When you see that advert for a new phone, you focus on the instant excitement of unwrapping the shiny new product and forget the disappointment that may arise from finding your piggy bank empty when you come to book your holiday. “It is easier to write off today’s decisions as tomorrow’s problem,” Atkinson-Toal says in the book.

Choice overload

The sheer array of options available can leave us feeling bamboozled – a phenomenon that is sometimes called choice overload. Studies show that the more offers available, the less satisfied we may feel after having made our decision. “After the rush of Black Friday, or any purchase made under time pressure, reality often kicks in about just how much has been spent on things that were not needed, fuelling a feeling of regret and likely leading to more product returns,” writes Atkinson-Toal.

All of which is certainly going to encourage me to exercise my critical thinking before I start my holiday shopping – especially when I feel rushed to make a quick choice. Simple awareness of the forces shaping our decision-making is likely to help. From my own writing on rational thinking, I know that a good rule of thumb is to actively argue with your intuitions. If you feel the impulse to buy something super expensive, give yourself enough time to list two or more reasons why it might be a bad idea. Maybe you will still conclude that you have found the ideal bargain, but at least you will have engaged some System 2 thinking to curb some of System 1’s excesses.

I’ll also be bearing in mind two reliable findings from the broader psychological literature. Spending money on experiences tends to bring greater happiness than buying physical things; and spending money on others tends to bring greater happiness than spending money on ourselves. Hosting a generous festive party, in other words, is more likely to leave me full of good cheer than any new device.

David Robson’s latest book is The Laws of Connection: 13 social strategies that will transform your life. If you have a question that you would like answered in his column, please send him a message at davidrobson.me/contact