Why Can’t We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains The Psychological Forces That Make Sales Irresistible.

Why Can’t We Resist Black Friday and Cyber Monday? A Behavioral Economist Explains The Psychological Forces That Make Sales Irresistible.

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Imagine you put on an old coat you haven’t worn in a while and, to your surprise, you find a crumpled $20 bill in your pocket. It’s amazing how good it feels. Is it possible to feel half a notch higher on a one-to-10 mood scale or a full notch?

Let’s imagine a different scenario. You’re doing the laundry, take out a just-washed pair of pants, and discover you forgot a $20 bill in the pocket — which has been completely ruined. How does this affect your mood?

If you’re like most people, you feel much worse about losing $20 than about gaining $20. This is loss-aversion . It’s one of many judgment errors that behavioral call cognitive biasedes .. The mental blindspot called loss aversion is one of the most fundamental insights of a field of behavioral science called prospect theory in the last few decades.

Loss Aversion is one reason why our minds get sucked into BlackFriday and Cyber Monday sales .. Retailers know that our instinctive reaction is to avoid losing, with research showing that this drive may be twice the powerful than the desire to make profits. They tap into our deep intuition to protect us from the loss of the opportunity that comes with short-term sales.

Similarly, loss aversion helps explain why so many marketing techniques involve trial periods and free returns. Retailers know that once you have bought something, you won’t be able to lose it.

In a classic research study illustrating this tendency, participants were divided into two groups: one was given a chocolate bar and the other a mug. They were then offered the opportunity to trade the object they had for another. Of the students given the mug first, only 11% chose to trade it for the chocolate bar, and only 10% of the students who got the chocolate first exchanged it for the mug. We want what we have and are not willing to lose it. For example, Black Friday and Cyber Monday sales offer a chance to purchase something at a discounted price for a limited time. In fact, behavioral scientists have a special term for people putting excessive value and being reluctant to give up whatever they have: the endowment effect, a specific form of loss aversion.

Let’s imagine a different scenario. It’s Cyber Monday, and you decided to check out the deals on an e-commerce website. You are confident that you will only find one or two of these best deals. Once you visit the website, however, you will be hooked. These deals look amazing. These deals are too tempting to pass up. You end up buying more than you planned and taking advantage of a lot of deals.

Why did this happen? Why couldn’t your mind control? It’s due to a cognitive bias called the restraint bias. We tend to underestimate the extent to which our impulses can be controlled. We have less self-control than we think and less willpower.

Related: Online Scams Are More Sophisticated Than Ever. Cyber Intelligence Expert: Here’s how to shop safely on Cyber Monday and Black Friday.

That’s why so many people overeat at buffet restaurants. Buffet restaurants would be great if we had self-control. We could get what we want at a lower price than regular restaurants. Yet the problem is that we overestimate our ability to control our impulsive desire to take more food, and loss aversion causes us to try to avoid losing the opportunity to take the wide variety of food available at buffets.

Black Monday and Cyber Monday are shopping equivalents to buffet restaurants. So many tempting deals around, with loss aversion driving us to not want to lose out, all resulting in shopping much more than we wanted. This article explains the psychological reason you are so enticed by Cyber Monday and Black Friday sales. Here’s the thing: The abundance of news stories, advertisements and social media posts around Black Friday and Cyber Monday makes it seem like everyone is thinking about sales on those days and looking for good deals.

As a consequence, our minds drive us to jump on the bandwagon of getting into Black Friday and Cyber Monday sales, a tendency that scientists call the bandwagon effect. We are more likely to follow others who align around a cause than those who don’t. They wouldn’t do it if they didn’t think it was a good idea.

Loss aversion, restraint bias, and the bandwagon effect are mental blindspots that impact decision-making in all life areas, ranging from the future of work to mental fitness. Recent research has shown that there are practical and effective ways to overcome these dangerous judgment errors. For example, we can use decision aids to limit our shopping choices. A good strategy for Cyber Monday and Black Friday is to decide in advance what purchases you want to make, and then buy them online. For example, you might decide to buy a certain laptop if it’s more than 20% off or a specific big-screen TV if it’s 30% off. You can save the webpages of the TV or laptop you are interested in buying and visit them on Cyber Monday and Black Friday to check if they are on sale. Be disciplined if they aren’t, and don’t buy anything else. You’ll end up spending more than you intended and may find yourself stuck with some unbelievable deals. Instead, wait for the Christmas sale.

If you are an entrepreneur selling products, you might consider how you can use loss aversion and restraint bias among your customers, either on Black Friday or Cyber Monday, or throughout the year. To help your employees make smart holiday shopping decisions, you might also consider sharing this article with them.

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