Unlearning in Behavioral Science

Recently I came across various materials* which state that many of the things I learned in grad-school at Erasmus University aren’t as I’ve learned them. Among them are the bodies of knowledge on choice overload, priming, ego-depletion etc. (Just as a note, Erasmus Research Institute of Management is in top 3 European research institutes in its field, so I got top level education from highly qualified professors.)

* This piece by Jason Collins I found particularly interesting. 

Nowadays, there is serious doubt casted upon ego-depletion, studies on priming have been challenged on a wide scale, apparently, choice overload doesn’t manifest each and every time and, it seems that, the endowment effect doesn’t manifest in isolated groups of hunter-gatherers, which means that it is not an innate (evolved) human feature.

It looks like I have to unlearn many of the things I have learned.

That’s interesting.

Yet, I can’t simply delete from memory knowledge (information) on ego-depletion (just as an example). Even if I could delete information from my memory, in the case of priming there is no clear list or criterion on which results hold and which don’t.

The situation isn’t as grim as it seems at first glance, particularly for the applied part of behavioral science.

The fact that not every result found in a scientific study (lab or field) doesn’t hold in different contexts is not exactly news. Moreover, people who profoundly understand behavioral science know that there are some strong and some weak phenomena. For example, we know that loss aversion and mental accounting are strong phenomena and we also know / knew that priming is a weak one.

When doing applied behavioral science work, you want to rely on the strong phenomena. Sure, you can use weaker ones such as priming, but you can’t rely on them.

For example, when designing an intervention intended to keep a space clean, it is essential to rely on convenience of trash-cans and social proof (social imitation – more broadly). Yes, you can dispense a citrus scent (olfactory priming) to promote cleanness, but that is more of an add-on and not the core of the intervention.

We knew that priming studies aren’t exactly at the top of reliability and replicability, but most behavioral science specialists have learned about ego-depletion and many (most?) took it as a given.

Apparently it is not.

However, this doesn’t bring huge changes to applied behavioral science work. The most important practical learning from the entire body of knowledge on self-control and ego-depletion is:

Design is more powerful than self-control

And it holds true.

Maybe the self-control issues that we face are not due to ego-depletion; they could be due to fatigue, forgetfulness, lack of (availability of) attention etc. Yet, how we solve them remains unchanged.

The fact that choice overload doesn’t manifest every time and failures of choice architecture aren’t exactly news, either.

Choice architecture works ONLY when there is no clear pre-existing preference (i.e. the chooser faces ambiguity).

I have been saying this in my training on choice architecture since 2013 (when I joined the field).

If in shop A (men) shoes come in sizes 40-45 and in shop B they come in sizes 41-49, I will buy 43 in either shop, simply because that is my shoe size.

For more on this topic read To Be Clear on Ambiguity 

  

Fewer options to choose from is simply easier for the consumer (chooser), but choice is about a lot more than being simple to choose.

Take the example of Total Wine shop(s). This is what they say on their “about” page:

Our typical store carries more than 8,000 different wines from every wine-producing region in the world, including more than 2,000 wines not available in any other store. (source)

Through the lenses of choice overload 8000 different wines sounds crazy. According to the choice overload principle they should have went out of business a long time ago. Here are a few explanations why they’re still doing well.

First, when wanting to be “the place to go to for wines”, you need to have lots of wines.

Second, many wine enthusiasts seek variety and want to explore. (Others simply want to get drunk and probably have an existing preference for the wine with the best alcohol/ price ratio).

Third, a wine bottle is a low-impact purchase. If you buy something you don’t like it’s just a few (more) dollars spent for an interesting* experience.

*interesting is a word used when you don’t like something and either you don’t admit it or you don’t want to say it out-loud.

For full fairness, Total wine uses choice architecture and offers a lot of structured choice.

Just as a rhetorical question:

Why do we put choices about houses, retirement plans in the same category with ones about jams, wine and coffee?

This, however, is another story.

Coming back to the applied part of behavioral science: We have to test if our interventions work or not, thus we can assess in each particular case how the number of choices offered influences the outcome.

When doing applied behavioral science we have to take into account the bigger picture.

For example, if in a coffee shop reframes the “bring your own cup” discount into a surcharge for paper-cups behavior shifts towards the desired direction: fewer paper cups used. However, it may also lead to a decrease in clients who simply don’t like the idea of paying explicitly for paper cups, even if the total price is the same as at the coffee shop across the street where the paper cup is included.

Moreover, clients who intended, but forgot to bring their own cup will feel bad (due to loss aversion) for having to pay for a paper cup. Moreover, they will experience regret, which is one of those emotions you don’t want to have associated with your business.   

One of the beauties of science is that it evolves and if we are to be professionals in a field of (applied) science we need to keep up with it and, occasionally, unlearn things. 

Shooting Yourself in the Foot with Focus and Loss Aversion

My wife and I are (re)visiting The Netherlands for a few days and we rented an apartment via booking.com. When we arrived, the owners asked us to pay the city tax in cash since they didn’t want to pay a processing fee to the credit card company. You can imagine how that felt like, particularly after 24+ hours without sleep and a trans-Atlantic flight.

Just to be clear, the city tax is about 15 Euros. I’m not sure how much they would have had to pay for the payment, but even a fee as high as 5% would have resulted in a cost of less than one Euro.

Unfortunately, this is not the only situation I encountered in which (small business) people shoot themselves in the foot because they focus on avoiding (small) losses on narrow mental accounts.

Some restaurant owners want each and every table (seating) to be profitable and, occasionally, become sales-aggressive or impolite.

A print-shop owner stopped handing out candy because someone took a hand-full from the candy jar.

A business owner wants to make a profit on each and every transaction, thus refusing to make some small deliveries.

A small-shop keeper refuses to install a bankcard-payment POS because the bank charges him 3% of every transaction.

Each of these examples makes intuitive sense: nobody likes to lose money.

The focus on making a profit on each and every transaction might sound like good management, but it simply isn’t.

Each such decision is like shooting yourself in the foot and later wonder why you can’t run.

Sure, a restaurateur might squeeze another few dollars or euros from a client, but there’s a good chance that person will never set foot again in the restaurant. A shop keeper will avoid paying the bank the transaction fees, but some existing clients might start avoiding the shop, while potential clients will not even consider it since they can’t pay with their bankcards.

You might think that such problems occur only for small businesses, but this isn’t exactly the case.

Let’s do a thought experiment:

Imagine that a friendly alien comes from the sky and proposes the following gamble: a fair coin will be flipped and if the space-ship side comes up, you will win 150$, while if the other side comes up you will lose 100$. Each side has a 50:50 chance to come up.

Would you take this bet?

I’m not sure what you would do, but I have shown this situation to hundreds of participants in my training programs in applied behavioral economics, many of them in pretty large businesses.

Only about 10% of them say that they would take this bet. For all the others, taking a bet in which you can either win 150$ with 50% probability or lose 100$ with 50% probability is unacceptable.

This holds even after I compute the expected value of the gamble (which is +25$)

One participant asked me if the bet is played only once and I answered yes. He said that if it is only once he doesn’t take it, but if it would have been played several times, he would take it.

Here’s the key: if you play this bet several times, on average your chance of overall gaining money increases, even if you will sometimes lose. If you play ad infinitum it is certain that you will end up gaining money.

Imagine a conference room with 20 people having to decide if each of them would take the above mentioned bet. If all of them are from the same company, it is like the group (company) would play the bet 20 times.

Up to now, no one realized this. Every person makes a decision on their own and, usually, the decision is to not take the bet. Overall the group (company) loses because everyone thinks individually…

I am not criticizing anyone, but it might be a good idea to take a look on the rewards and penalties systems. If, during an evaluation period of one year, an (each) employee has to make one such decision she will most likely not take the risk because there’s a good chance (50%) that she will lose money for the business and her evaluation will be bad, her bonus will disappear and so might her job.

Small businesses shoot themselves in the foot because they focus on avoiding loses on each and every transaction.

Large(r) business shoot themselves in the foot because they focus on evaluating each employee / department / manager etc.   

Behavioral Science Meets Marketing Communication and UX Design

On September 21^st I gave two workshop sessions on how behavioral science can improve marketing communication and UX design, respectively.

I very much enjoyed giving the two half-a-day workshops to the very nice audience at LiveHealthier – a corporate wellness company just North of Washington DC. Both workshops were well received by the audience in both enjoyment of the sessions and usefulness.

Here’s what Amy Troop SVP, Consumer Experience at LiveHealthier said about the training:

Nick Naumof conducted two sessions for our consumer marketing and product development teams on applying the theories of behavioral science to marketing communications and UX design.

Participants found it to be time well spent and came away with immediate applications for the learnings in their day-to-day work.

Thanks, Nick, for all your efforts in crafting a meaningful program for our team!

Thank you Amy, Demetrius and Sasha for the great support in organizing this session! Thank you to all participants who made the day delightful.

Here you can find details on my Learning Programs on how behavioral science and behavioral design can make your products & services work with human nature.

You can take a look at my dedicated programs on behavioral design for banking  and health & wellness.

Is it Wrong to Take the Elevator to the Gym?

When I go to the gym, unconsciously (habitually) I take the elevator. My usual work-out is around 35 minutes (+/- 5) and the main purpose is to burn some calories (I’m not into body building).

Quite recently I realized that my habitual / mindless behaviour is, in a way, awkward. I live on the 10^th floor and the gym is in the opposite building (just across an alley) on the 12^th floor.

If I would be a perfectly (economically) rational  creature, I would go down the stairs from the 10^th floor to the ground floor, go out of the building and then go up the stairs 12 floors.

Since I am going to burn calories by means of making physical effort, subsequently sweating, several potential reasons for taking the elevator are automatically excluded. I’m taking the elevator not because I want to preserve energy – avoid effort. For sure I’m not trying to preserve my good looks (i.e. avoid sweating) since I am going to sweat at the gym.

Saving time could be a plausible explanation for my irrational behaviour, but I seriously doubt it. I could simply take the stairs (both down and up) and cut my gym work-out time by 10 minutes. I assume the overall calorie burn-out would be similar. Moreover, I don’t count (monitor) burned calories, so, for sure, this is not the reason.

The more realistic reason for me taking the elevator to the gym is that I formed a habit: go out of the apartment to the elevators. This is because of convenience – going with the elevator is easy and rather fast.

Moreover, the elevators in the building are very salient: there are four of them positioned in the very centre of the building, in a spacious hall. On the other hand, the stairwells are almost hidden and the doors are grey – taking the stairs is clearly not the natural thing to do.

Beyond the habit explanation, there is, I believe, a more profound explanation.

In psychology of money there is the phenomenon of mental accounting – discovered by Richard Thaler. In a nutshell, mental accounting means that we associate different amounts of money with various expenses and we label “this” money for “this expense”… we have “holiday money”, “retirement fund”, “beer money” etc.

Moreover, it is very hard for us humans to shift money from one account to another, or to integrate accounts. If you want to learn more on mental account check out this post: 

I believe that we think using mental accounting when it comes to any type of fungible resource. In my case of taking the elevator to the gym, I do not find it natural to use my energy (effort) to get to the gym, but I have no problem in spending lots of effort in pointless weight-lifting and pedalling on a fixed bike.

In other words, I find it difficult to spend the gym effort on climbing stairs.

This type of automatic thinking goes beyond awkward getting to the gym behaviour.

I remember that a few years ago, I asked someone for a favour that would have taken about 20-30 minutes of work. As a reply I received a long email telling me how he was too busy to make the effort. The answer (probably) took at least 15 minutes to write…

Fairness and the Greek Government Decisions

In the past weeks the Situation of Greece and its debts have been on the forefront of the main news channels in the world.

Of course, there is a lot of room for discussion and debate… mainly on macro-economic terms, but this is a blog dedicated to behavioural science, so I will restrict my comment on the topic of “Fairness”- which is a highly important behavioural element.

At least on the main European news channels, there is this oversimplification that developed, rather rich and more stable countries lend money to Greece (a lesser developed and competitive country). Oversimplifying even further, it is said that Germany (EU’s flagship) / German tax payers is / are lending money at very low interest rates to  Greece (kind of the problem child of the EU).

Things aren’t all that straight forwards as they are presented on TV. Greece received (and hopefully will continue to receive, though not unconditionally) money from three sources – (1) The EU commission mainly the Countries who use the Euro as a currency (aka. Euro-Group), (2) The European Central Bank and the (3) International Monetary Fund (IMF).

What is less known, is that among the countries contributing to the funds received by Greece there are countries such as Slovakia, Lithuania and Estonia. All of these countries are using the Euro as their currency. However, these countries are below Greece when it comes to GDP per Capita (per person) and the overall standard of living is worse in Slovakia, Lithuania and Estonia. Moreover, other countries have contributed indirectly to the funds received by Greece. For example, my country of birth – Romania – which does not use the Euro as currency, has increased its participation in the IMF so that the IMF would have additional funds to lend to Greece.

Unfortunately, Romania is way behind Greece in terms of standard of living and GDP per capita. Moreover, in 2010 Romania took some drastic and painful measures (e.g. 25% cut in all public servants pay, a VAT increase from 19% to 24%) in order to tackle the effects of the global recession.

Since we are talking about fairness, I have to be fair and say that the bulk of the funds allocated to Greece came from Europe’s most developed economies (e.g. France, Germany, The Netherlands, Belgium, Austria), but also from other large countries facing difficulties (e.g. Spain and Italy).

I am fully aware that the Greek Government and the Greek people have their arguments. Nonetheless, I wonder: how fair is it for Greece to reject the reforms for loans program and to take money from countries which are, overall, worse off?

How fair is it for the poor to support the middle class? Or is that happening already at other levels of society?

Why Are You Asking Me Your Question?

A couple of days ago I noticed that some of my connections on Linked In were answering a question posted publicly. I do not want to name names, but since the question concerned two packages for dog food, it is inevitable to show the two packages.

The message on Linked In was:

Hi, Would love some feedback! Our current packaging is the design in the brown Kraft bag on the left and a draft of our new packaging idea is in the creme bag on the right. Which design do you prefer??

Beyond aesthetics and preferences for dog-food bags, there are some very serious issues with this kind of pseudo-research.

First, there is the obvious sampling error. The linked-in connections of the person who asked are not necessarily dog food buyers. I guess the budget for market research was very restrictive.

Second, it is utterly wrong to ask people which one of these two packages is preferred. Which one to pick, is the question that the marketer has to answer. However, the buyer (because the consumer is the dog – hopefully) will never ever have to make this choice.

Choices and preferences are to a large extent dependent on the context of the available options. We also know that choices imply (sometimes unconscious) comparisons. If package B is aimed to replace package A, then the buyers will never have to make the choice between A and B.

Third, the choices buyers make are not made in a void. In other words, the choices dog-food buyers will make are between competing products and one of the products (packages) presented above.

So, a correct way to do things would be to have a between subjects design with two conditions:

Condition A: N competing brands + package A

Condition B: N competing brands + package B

Here N is the number of main competitors on the market. The same competing brands should be used in both conditions.

What should be measured is the choice share for each package in the two conditions.

Fourth, asking people about their preferences is sub-optimal. Preferences are not as stable as we’d like to think. They depend on the other options the choice set has and on many other factors. In this case, it is obvious that asking people online about their future choices in supermarkets is a bit of a stretch.

Fifth, related to asking about preferences and purchase intentions, there is quite a difference between intentions / preferences and actual behavior. So the best way to do this is to measure behavior and not intentions. Though, my friend John Kearon, thinks there’s a better way to do this kind of research.  

The interesting thing is that someone had to make a choice / answer a question. This person then asked other people the question she had to answer. However, the respondents have to answer different questions to make their choices.

Now, the question I have to answer is:

Why I wrote this post on dog-food packaging when I am definitely a cat person.

P.S. The person who asked this question owes me a beer for (free) consulting… A Hoppy Cat beer :)

(source of picture )

Later edit (15 Jan 2016): Here's another similar example (also via Linked In), different area, but the same problem:

Good morning all! I would greatly appreciate if you could comment on which logo you prefer most. I can't say much more than it'll be for a design business.   Any comments, likes, shares and feedback will be appreciated.  Thank you!

Buy it! 3% Pure Fat! Classic Framing Example

The Framing Effect is probably the best know implication of loss aversion. A piece of information can be framed either as a gain or as a loss by manipulating the reference point.

In this case, the ham is presented as 97% fat free which implies that the reference point is 100% pure fat. Thus having it 97% fat free seems like a gain.

However, the same information could be framed as 3% pure fat, implying that the reference point is 0% fat. Having the information framed as 3% pure fat would make it feel like a loss.

Naturally, (most) people are more willing to buy something that is 97% Fat Free than they are willing to buy something that is 3% Pure Fat. 

Personal note: Before moving to the USA, I had only heard about this framing, never saw it with my own eyes...

Smart, but Deceiving

Last weekend we went shopping (as usual for most people) and I noticed this very interesting, smart, but deceiving piece of merchandising.

Bottles of (allegedly) lemon juice are placed in the Fruits section and they are presented exactly in the same way as fruits are.

I don't fully know if that is actually lemon / lime juice, but I seriously doubt it since the area is not refrigerated. 

It's a piety that this knowledge is not used for better purposes.

How (Not) To Design a Lottery

Early this year, the Romanian Government, through the Finance Ministry, decided to organize a lottery of receipts. The aim was to encourage Romanians to ask for the receipt at (small) shops, restaurants etc. The goal was to tackle tax evading done by small businesses.

Naturally, the rules of the lottery couldn’t focus only on small shops and restaurants (equal opportunity), therefore all receipts were accepted in the lottery.

About two weeks ago there was the first draw of the lottery… and here’s where things started to go bad.

As in any lottery there are two components: (1) the prize and (2) the probability of winning.

The prize of the lottery is 1.000.000 lei (local currency) which is approximately 220.000 Euros. That’s not bad, all in all.

The probability of winning is rather difficult to understand, but, in this case is rather simple. The lottery is organized each month and the random algorithm determines: (1) a day and (2) an amount. For example, the winning receipts are all receipts from February N^th that are of X lei (the decimals don’t count). X can be between 1 and 999 lei.

Applying a simplistic computation, the probability of winning the lottery is 30 (number of days in a month) * 1000 (approximation of the number of possible amounts on a receipt). This means that the chance of winning the lottery is 1 in 30.000.

This might look like a small chance, but in reality it isn’t (at least when it comes to lotteries). In a country of about 18.000.000 people it is very likely that there will be lots of winners… at there were… between 8 and 9 thousands people who registered with the tax authority to claim their prize in the two weeks after the first draw.

Just as a note, in this first draw receipts from 50 days were able to win, thus the chance of winning the lottery was 1 in 50.000.

Assuming that there will be a total of approx. 10.000 winners, this means that each of them will receive a prize of 100 Lei on which the state will take 16% tax, leaving each winner with 84 Lei (less than 20 Euros).

Personally, I don’t have any kind of (positive) expectations from governmental officials. However, I would have expected from people with an Economics degree (they work in the Ministry of Finance) to know how to compute probabilities and to know the Expected Utility Model. Moreover, the (former) Minister of Finance who promoted this lottery has a PhD. from Harvard University.

Here’s how a lottery should be organized:

You need a very large prize that comes with an extremely low (e.g. 1 in 20.000.000) probability of winning. The very large prize with a very low chance of winning creates appeal – it has a magnetic effect that draws people into the lottery in the illusory hope of having a life-changing sky-fallen amount of money.

You need a large number of small prizes with small (e.g. 1 in 10.000) probability of winning. These small, but rather likely wins create availability – hey, my cousin’s neighbour wan 200 Lei last month at the lottery. They also keep alive the hope of winning the large, but highly unlikely prize.

 Details matter much more than many of us think…

Behavioural science is a gold mine for service design and customer experience – Interview with Nicolae Naumof on Adrian Swinscoe’s blog

Two weeks ago I gave this interview for Adrian Swinscoe’s blog. In it I explain my view on applying behavioural science in service design.

Naturally, I speak on what is behavioural science, what drives human behaviour and plead for a simple, two steps approach on applying behavioural science in service design: (1) Use the scientific literature on human behaviour to come up with behaviourally informed interventions and (2) test them, because no one knows the (absolutely) correct answer.

Interview can be listened here (30 mins or so): - open in new tab ;)

Interview and full transcript on: Adrian Swinscoe’s blog 

In a gold mine, you will not find gold bars …

More on applying behavioural science in service design www.Naumof.com

Salt & Pepper Choice Architecture

Last year (2014) I had the largest number of flights in my life. Alongside the convenience of fast traveling, flights come with several inconveniences, one of them being in-flight food.

In-flight food can range from (almost) terrible – KLM – to quite good – Tarom – to surprisingly good (for flight food) – Turkish Airlines.

One of the reasons for in-flight food being not exactly a treat is the airlines’ need to cut costs. And this post is a free advice on how airlines can cut costs when it comes to food without damaging the clients’ experience.

Usually, the in-flight food comes with Salt and Pepper in small envelop-like packaging as in the picture below.

While, in our minds, salt and pepper go together very well and are seen more or less as equals, there are some serious differences between them when it comes to prices and use.

You might not realize, but (black, grinded) pepper is more than 79 times more expensive than (white, regular) salt.

According to prices in Albert Heijn (the largest supermarkets chain in The Netherlands), a kilogram of black grinded pepper of the cheapest kind is € 23.80, while a kilogram of regular table salt of the cheapest kind is  € 0.30.

  

When it comes to using salt and pepper, I believe there is a considerable difference. There are a lot more people adding salt to their food than are people who add pepper. It might be just my biased view, but I believe a lot (the huge majority) of the pepper packs are never opened and end up in the trash.

At first glance, this might not look like an issue, but every 200 packs of 5g of pepper thrown in the garbage, are equivalent to throwing 23 euros in the trash. Scale this to millions of passengers each year and things will look very different.  

Just as a note, it would be nice to have some garbology data on this – looking in airplane trash bags and see exactly how much of the pepper ends up unopened in the garbage.

In this light, airlines could simply eliminate pepper from their meals, thus avoiding unwanted waste. But this would damage the experience for the passengers who want pepper in their food.

The solution comes from Choice Architecture.

Instead of providing pepper by default, airlines could make pepper a (free) additional option.  

Here’s a rough prototype on how I see things being solved.

The envelope-like pack of pepper can be replaced by a small piece of paper with the message:

Please ask a flight attendant for pepper.

This change would bring some considerable cost cuts to airlines.

Of course, it would bring some headaches to pepper producers… more on the side-effects of applied behavioural science in a future post.

If you’re curious on how choice architecture can help improve your business, take a look at Designing Decisions.

Applied Behavioural Science the Istanbul Way

At the end of 2014, my beloved wife and I spent six days in Istanbul. Apart from the traditional touristic attractions, which are truly astonishing, I was amazed by the high level of applied behavioural science techniques used by businesses, at least in the touristic area of the city.

Most likely the people who use these techniques have not studied behavioural science. I seriously doubt that many of them even finished high school. Yet, when it comes to deploying sales and marketing techniques rooted in behavioural science, the merchants in Istanbul are better than many people who have studied this beautiful branch of science at Master or PhD level.

Personally, I realized that I could have learned most of what I know by working six months in Istanbul: 2 months in a restaurant, 2 months in a shop and 2 months at the Grand Bazar.

Here are some examples I encountered:

1. Establishing liking and similarity and the use of the Representativeness Heuristic.

Many merchants, including street vendors and restaurants, use the representativeness heuristic in order to choose the language in which they approach people on the street. In my case, I heard lots of people approaching me in Russian. Yes, I do quite look like a prototypical Russian, but I am not.

In addition, a lot of the people whose job is to bring clients from the street, approach passers-by with “My friend”. 

As Cornelia (my wife) said, We never knew how many friends we have there …

Moreover, the majority of merchants speak some very, very basic level of most languages that tourists speak. Not seldom, I was greeted in Romanian and once, we even spoke in Romanian with the seller who was quite fluent.

Another way of establishing liking used by merchants in Istanbul is the universal language of football (soccer for readers who wrongly believe that football is a different game). Usually, tourists are asked by vendors where they are from. 

The moment one answers the question, the merchant replies with names of footballers from the country the tourist is from.

In the case of Romanian football players, the Turks know quite a large number of names, but this is mainly because many Romanian footballers played in Turkey. Usually I got: “Hagi, Popescu, Filipescu, Ilie” (all played at Galatasaray).

Once I said that I am from The Netherlands and the only name I got was “Dirk Kuyt” … kind of thin considering the large number of famous Dutch footballers.

2.  Making things easier and simple.

I could write a lot on how the merchants of Istanbul make it simpler for tourists to spend money, but the one thing that impressed me the most was that in many restaurants and shops had especially employed people to open the door once a passer-by stops even for one second in front of a shop or a restaurant.

3.  Choice architecture and leaving a tip twice.

In restaurants, I noticed that the staff was well versed in encouraging customers to leave a tip twice. The custom in Istanbul is to leave a tip of about 5-10%. Some restaurants include the tip in the bill. For example, if the food and drinks amount to 64 Turkish Lira (TLR) there is another 6 Lira added for service and the total is written in large fonts 70 Lira.

Since the bill is written, usually, in Turkish and most tourist customers look only at the total, sometimes they leave another 5-10 Liras as tip, even if the service was included in the initial bill.

What I found fascinating was that at one restaurant which included the service in the bill, the change came in a particularly interesting denomination. For example, if the bill was 64 Lira, the total was 70 with 6 Liras for service. If the client paid with a 100 Liras banknote, the 30 Liras in change was brought as one banknote of 20 Liras, one banknote of 5 Liras and five coins of 1 Lira. This encourages customers to leave 2-3 Liras (in coins) as a tip, even if the service was included.

4.  Endowment effect

Quite a few times I was approached by people working at restaurants with the following phrase:

“Sir, your table is right here on the terrace”.

Now, who would want to lose their table?

5.  Physical environment influences and apparent reciprocity.

After the first night spent in the hotel, we came back from our sight-seeing and noticed that on the night stand there was an envelope with “Tip Box” written on it.

Subsequently we noticed that virtually everywhere there were tip boxes.  

Another interesting use of environmental influences was that in all restaurants and shops the temperature was quite high. It was December when we visited Istanbul, but the weather was quite OK and it is nice to eat or shop in a warm environment, but I don’t think that sweating is necessary. Nonetheless, a higher room temperature is always good for spending money.

In some restaurants and shops the customers are offered tea or a small desert (Turkish delight or baklava). This is not exactly free, but the staff gives the impression that they do it especially for you. Subsequently the likelihoods of purchasing and / or leaving a larger tip increase.

6.  Anchoring and mocked bargaining.

Yes, Bargaining is part of the touristic experience in Istanbul. And the Grand bazar is the most appropriate place to do so.

The thing is that the merchants in the Grand Bazar and, in fact everywhere in Istanbul, are more versed in sales and bargaining than all the tourists put together.

We looked at an artisanal coffee set as a gift for my parents and I asked how much it was in Euros. The merchant said:

“Normally it is 80 Euros, but now because it is winter and there aren’t many customers in the bazar it is only 50 Euros”.

The Grand Bazar was not packed with tourists, but it wasn’t empty either. We managed to get the coffee set for 46 Euros, but when we arrived home we realized that it only looked like copper … it wasn’t real copper... it was painted with a copper like paint...

7.  The honest cheater (?)

It was quite late and after a 4 hours flight, 3 hours delay and a crazy half an hour taxi ride on the streets of Istanbul, we were quite exhausted and happy that we finally arrived at the hotel.  

The gentleman at the reception was very welcoming and gave us a 5 minutes crash course on how we will be cheated by merchants, taxi drivers etc. Personally, I knew that we will be cheated, which is part of the tourist experience in Istanbul.

What I found very interesting, was that at the end of the micro-lecture the gentleman said, with the aura of a concierge, that if we want to buy anything – leather, gold, carpets etc. – we should ask him and he will recommend some honest shops…

This got me wondering about the commission system that I believe works very well in Istanbul. Although I have no proof to doubt his honesty, I had a feeling that everything he said could be reframed as:

“We don’t want others to cheat you. We will cheat you and you will have the impression that you got a good deal.”

Well, we weren’t there for shopping and we knew that we will be cheated, at least a little.

Everyone has their limits

On the last full day in Istanbul, we were approached for the zillionth time by a street vendor who was trying to sell us a tourist guide of Istanbul.

He employed the use of the representativeness heuristic: and immediately offered an Istanbul guide in Russian. (I do look like a Russian, but really I am not). I answered that we are not Russians. The vendor, immediately found the next best assumptions:

“Aaa! Ukrainians. I have in Ukrainian”

“We are not Ukrainians”, I answered

“Latvia?”

“No!”

And then, the traditional: “Where are you from?” followed.

I was already annoyed enough by the quite aggressive sales techniques, of being mistaken for a Russian for the zillionth time and being asked 30 times a day “Where are you from”… So I said:

“Namibia”

The very prompt answer was: “Hai Sictir” which I immediately understood since it is used in (old) Romanian for “Go F*ck yourself”. I guess in Turkish it has the same meaning…

All in all, Istanbul is a great place to visit. We were particularly fortunate that our friend Nejla is living there and we got some local insight. Thank you Nejla!

I wish you all a good 2015!

And visit Istanbul if you want to see Behavioural Science applied in merchant practice… 

Though, don’t bring too much money. The local merchants are very skilled in taking it from you! 

Take a look at my new website www.naumof.com