Category Archive: psychology

Oct 09

The sunk cost fallacy – lessons from poker

Poker isn't the only place we chase 'sunk costs'

Poker might not seem like the obvious place to start when it comes to learning about saving money. But it is a great showcase of human behaviour.  The best poker players know two things; statistics, and not to chase sunk costs. So you’re playing Texas hold ‘em. You have your two cards in the hole, and the dealer lays out the flop, the first three communal cards. It’s looking good, a potential full house. So you start to bet, feeling reasonably confident. However, as the next card come down, with its own round of betting, it looks like someone could get four of a kind or a straight flush. A …

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Jul 27

The Psychology of PowerPoint presentations

PowerPoint: you are feeling sleepy...

No-one’s professional life has been left untouched, and unscarred, by PowerPoint. Whether it’s overdosing on too much information, seeing too many ‘humorous’ generic clip art graphics, or the creeping guilt when you realise that the entire audience is going to need a stiff drink once you finished traumatising them. But help is at hand. A recent study (Kosslyn, Kievit, Russel and Shephard) has investigated other ways in which people unintentionally make slide show presentations unbearable, or as they say: “psychological principles are often violated in PowerPoint slideshows”. It’s well worth reading in its entirety, (go through the link, you can download the pdf on the right of the screen), and while …

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Jul 20

Embracing failure

sometimes you have to roll the dice

If you never fail, you’re not trying. Successful people usually have a number of failures behind them. Richard Branson has lost more money than most people ever earn in a lifetime, and is obviously extremely successful . Anyone even remember the Virgin Pulse media player? It’s natural to want to avoid failure. During our evolution, failure would have had pretty horrendous results, and we are still hard wired to avoid it. In the charity world, failure can mean the loss of hard-earned income, donor trust, or even the respect of your peers.  I am sure we all know someone who seems to have risen to the top without making an …

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Jul 18

How to use ‘anchoring’ in procurement

Using psychology to get better deals

We’re strange animals. But while we don’t always think logically, we can often be quite predictable. One of these little quirks we have is called “anchoring” and it’s one of the most reliable and easily replicated phenomenons in psychology. Simply put, people are generally terrible with numbers. For example: what’s better – A 50% increase in quantity, or a 33% discount in price? Not only are they the same, but using the first tactic is used all the time on the high street as it demonstrably increases sales. And this means when we are presented with a number, we tend to ‘anchor’ any following calculations around this first number. Simply …

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Jul 10

Working from home is more productive

working from home increases productivity and reduces stress

A little while ago I gave you a list of free software that enables you to work from home. With the Olympics getting ever closer it’s something you need to seriously consider. Travel times are expected to at least double, if not triple. While you may be willing to get out of bed earlier, and get home later, the truth is the patterns are going to be unpredictable, and you’ll find it very difficult to put in the hours at your desk. So, if you need to convince your boss that homeworking is a good idea, that’s half the story. The other half comes from a recent study from Stanford …

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Jun 28

Overcoming the bystander effect

CharityLabs - getting people more involved online

You’ve most likely heard of the Bystander Effect. It’s one of our little quirks that means that the more people witness an incident, the less likely they are to intervene. One of the most cited cases is that of Kitty Genovese, stabbed to death in New York in 1964. 38 poeple claimed to have witnessed her murder. No-one intervened, or even called the police. There are a number of reasons cited for this. The diffusion of responsibility, our brains’ slowness to react to extraordinary events, even social conditioning – the need to conform to what everyone else is doing. A recent study, however, has shown that there are ways to …

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