Soon after the end of communism
in Romania, I watched some old cartoons with Superman. They were old, but for
me as a young child they seemed like the best thing possible and I played them
on the VCR for hundreds of times. This is how the phrase “Is it a bird? Is it a
plane? No! It’s Superman” got into my memory and very likely will be there as
long as I will have memory.
But enough with my childhood
story! The phrase “Is it a bird? Is it a
plane? No! It’s Superman” is highly illustrative for what in psychology is
called the “representativeness heuristic”. If something flies then very
likely it is either a bird or a plane, because when we think of things that
fly, the aforementioned two are pretty much what flies.
Remaining in the area of birds, let’s see what a “bird” is. What is it? In
your own words… fill in the blanks:
A Bird is __________________
If you did not cheat by searching
for a formal definition, most likely you answered something like this: “It’s something that flies, has wings and
lays eggs”. Quite close to the formal definition which is: “a warm-blooded
egg-laying vertebrate animal distinguished by the possession of feathers,
wings, a beak, and typically by being able to fly” according to
oxforddictionaries.com (source http://oxforddictionaries.com/definition/english/bird).
The informal definition of “something that flies, has wings and lays
eggs”, however is incomplete and inaccurate. Something that “flies, has wings
and lays eggs” is also typical for most insects (well all insects have
wings but not all fly … and no! Spiders are not insects). As we know, birds are
not insects. In addition, something that “flies, has wings and lays
eggs” does not accommodate some actual birds such as the ostrich, emu and
penguin.
Now, let’s see why and how the simplistic definition of a
bird came to be. First of all, we as
(normal) humans are not necessarily good
at giving clear, accurate and exhaustive definitions… after all why would
there be dictionaries if we were? What
we are good at is identifying and remembering prototypes.
When I asked you to come up with a definition for “bird”, very likely
you did not have in your memory the formal one. This is unless you are an ornithologist
… So, without a formal definition stored in memory, you retrieved from memory “a bird” or to be more exactly “the prototype
of a bird” and then described it and came up with a definition.
To put it a bit differently, you defined a bird as being the description
of what a prototypical bird is for you.
Since birds such as penguins and
ostriches are quite rare in most of the world and especially in cities (where I
assume most of you live in), the
prototypical bird in your mind is something like a mixture of a pigeon, crow
and sparrow or seagull. All these birds fly and have wings…
Before ending with the “bird
business”, let’s summarize: we humans think
in prototypes and not formal definitions. What a prototypical “something” is is
heavily influenced by our experiences and subsequently what is stored in
memory.
Not giving an accurate, complete
and exhaustive definition of a bird is not an important issue. However, we use prototypes to make judgments in considerably
more important areas such as voting, romantic life, job choosing (if one has to
choose), purchasing decision etc.
One very nice example of using
prototypes to make (political) decisions is given by Malcolm Gladwell in his
book “Blink” (chapter 3). Gladwell tells the story of Warren Harding who ended
up being President of the USA. His rapid ascension in political life was mainly
due to his good looks. As Gladwell says, this guy “looked like a president”. Unfortunately,
his 2 years mandate is remembered as one of the worst in USA history.
The essential aspect of
understanding the representativeness heuristic is how it works. It essence, when
we make judgments we very often ask ourselves one question, but we answer
another one. The first question is difficult, while the second is easy to
answer.
Let’s illustrate this. Imagine
yourself as a voter in the elections won by Warren Harding. You want to make a
good decision and you ask yourself the following question: “Is Warren Harding a
competent, hardworking, visionary, patriotic leader?” or putting things a bit
more simpler, “Is Warren Harding going to be a good president?”. By all means
this is a difficult question. Honestly, even in the XXI-st century with
virtually unlimited information about politicians it is really hard to answer
the question.
At the same time, another
question pops into your mind. This time it is a rather easy one: “Does Warren
Harding look like a good president?”. In other words, “Does he fit the
prototype of “good president”?”.
Now, this question is easy to answer
because you can simply compare the candidate with your mental image (prototype)
of a “good president”. The answer is simple and comes immediately into mind. “YES”.
Or at least that is what the majority of voters in those elections answered.
The power of representativeness goes beyond fuzzy complicated questions
about politicians’ qualities. What if in aforementioned example of you
being a voter, you would have some
statistical background information? What if you knew that there is a one
out of three chance that Warren Harding will be a good president? Would you
still consider him to be a good potential president? Research tells us that you
would still think that he will be a good leader and that you will simply ignore
the statistical information which tells you that it is twice more likely for
him to be a bad president than a good one.
The fact that people ignore statistical information and
make judgments based mostly on representativeness has been proven in a
legendary study by Kahneman and Tversky from 1973. Participants in the study
were presented with the following description of a student:
“Tom W. is of high intelligence,
although lacking in true creativity. He has a need for order and clarity, and
for neat and tidy systems in which every detail finds its appropriate place. His
writing is rather dull and mechanical, occasionally enlivened by somewhat corny
puns and by flashes of imagination of the sci-fi type. He has a strong drive
for competence. He seems to have little feel and little sympathy for other
people and does not enjoy interacting with others. Self-centered, he
nonetheless has a deep moral sense.” (source: Kahneman and Tversky (1973) as
cited by Kahneman and Frederick (2002)).
Some participants in the study were
asked to rank the nine fields of specialization within the university (such as computer
science or humanities) by the degree to which Tom W. “resembles a typical
graduate student.”
Other participants were informed
on the proportions of students enrolled in each of the nine specializations
(for example “3% of students are enrolled in Library science”). Next they were
asked to rank the specializations according to the likelihood of Tom W.’s specializing in each.
To make things a bit simpler,
some participants were asked to evaluate (rank) field of study based on how prototypical was “Tom W” to each of them.
Other participants were provided with statistical information on the number of
students in each field of study and next were asked to evaluate (rank) these
fields of study based on the probability
that “Tom W” is enrolled in each of them.
The two groups ranked the fields
of study virtually identically (correlation coefficient of 0.97). In other
words, people judged the probability by
means of representativeness. Most interestingly, the statistical
information provided was virtually ignored completely.
If you read the description of
Tom W. you see that somehow he fits the
prototype of a “computer science” geeky student. At the same time, there is not one single hard fact that
would be causally linked to him being a “computer science” student. There
is no single bit of information that would make us say beyond any doubt that he
is in “computer science” and not in “history”. The description doesn’t say that
he is good with numbers, likes to write software or knows how to take a
computer apart to the smallest piece and put it back together.
Despite this lack of hard causal
information we tend to see Tom W. as a “computer science guy” and not as a “Literature
student”. Moreover, we tend to ignore
basic information. If in the
description there is not hard fact to tie Tom W. to a particular field of science,
then it means that the base-rates for each field apply. This means that in
absence of any additional information, the
likelihood of Tom W. being a literature student is equal to the proportion of
literature students in the overall population. If 15% of all students are
in “Literature”, then it means that Tom W. (regardless of his description) has
a 15% chance of being a literature student.
Let’s go a bit back to the birds…
Go and ask a colleague (who has not read this post yet) the following question:
“Something that has wings, flies
and lays eggs is more likely to be:
A. a bird or
B. an insect?”
I guess most of your colleagues
will answer quickly that it is more likely to be a bird, despite the fact that
on Earth there are far more insects than birds. This is because in our minds “something
that has wings, flies and lays eggs” fits better the prototype of a bird than
it fits the prototype of an insect.
But, apart from office fun with
birds and insects and from fictional students with poor social skills, representativeness based judgment has very
serious influences in our lives, even beyond voting good looking politicians.
Consider the following example.
You have some money to invest (or at least let’s pretend you do) and you want
to invest in a small technology company. The following two options are
available:
Option A: is a small company in
the technology business that has 50 employees. The main office is located in a
class A office building in the business center of the city. The CEO of the
company is a 34 years old man with a funky hairstyle that has a very active
presence in social media.
Option B: is a very small company
in the technology business that has 20 employees. The company has a small
office located in an old factory building at the outskirts of the city. The CEO
of the company is a 36 years old guy who gives little attention to his physical
appearance. He has neither a facebook nor a twitter account; he uses the same
e-mail address he has been using for the past 15 years.
In which company would you put
your money into?
If you answered “in the first one”
(option A), then you are a “victim” of representativeness. Both descriptions
tell you virtually nothing relevant for your decision.
Let’s take a step back and identify the right question to answer
if you want to invest in a company. This question is “which company will achieve market success and have profits (hopefully)?”.
In the two descriptions of the companies I gave you absolutely nothing about
income flows, profit margins, growth potential etc.
What I gave you is perfectly
irrelevant information on things that seem to be related to success or better
yet, information on what we believe to be a successful company.
So what if the first company has
50 employees and the second only 20? If you watch the news you will hear about
companies cutting jobs to increase profitability, which is what you should care
about as an investor.
So what if the guy running the
second company doesn’t care about his physical appearance? Have you never seen
a picture of Donald Trump?
Thinking in prototypes and making judgments based on representativeness
is simply natural for people. Usually this goes quite ok.
Before ending, I would like to
make a brief observation about marketing
research and the fact that people use representativeness for a lot of
judgments.
Typically, a marketer’s job is,
among others, to achieve brand awareness. Now, this brand awareness comes in
more forms and one of them is “top of mind” in the sense of a certain brand
being the first thing that pops into consumer’s minds when a product category is
mentioned. Other types of awareness focus on recognition of a brand.
A typical example of a question
that investigates top of mind awareness is “What is the first brand that comes
to your mind when you think of hamburgers?”.
I have nothing against top of
mind awareness, but I ask, is it as important as most marketers think it is?
After all, if people make judgments by
assessing representativeness, isn’t it more important to make sure that we are
recognized by our customers and not necessarily take that “top of mind” spot?
Note: This post is documented
from:
Kahneman, D. and S. Frederick
(2002).”Representativeness Revisited: Attribute Substitution in Intuitive
Judgment,” in Heuristics and Biases: The Psychology of Intuitive Judgment. T.
Gilovich, D. W. Griffin, and D. Kahneman (Eds.). New York: Cambridge University
Press, 49-81.
Gladwell, M. (2005). “Blink: The
Power of Thinking Without Thinking” New
York: Little Brown and Co
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