Special Numbers for Special People

Brent Beshore says that people are messy. They’re weird too.

Part of the fun of social science research is putting people in situations and seeing what they do. We think people are weird because these experimental conditions have logical rigidity. It’s a world where A < B and B < C and no-way-Jose can C > A.

One way to think about this is the Illusion of Control. One paper is the Irwin and Goodwin, Special Random Numbers.

Here’s an experiment. Ask one group of individuals to choose three numbers for a lottery. Assign another group of individuals three numbers for the same lottery. Then announce to both groups that there was a such-and-such mistake. Note: a such-and-such mistake is a sign that you may be in a social science experiment.

To remedy the mistake, everyone can switch to a new set of numbers. (But wait, there’s more). The kind researchers are offering a new lottery, for those that choose new numbers, with even better odds of winning.

The punchline is that the people who choose their numbers tend to keep their numbers.

If that weren’t enough, people will bet more if they are given random numbers with meaning. “We establish that numbers generated randomly by certain systems (e.g., dates and names) are preferred to gambles of equal expected values and equal (lack of) control.”

The author’s guess, “It is possible that propensity (and associated enjoyment) underlies other types of decisions as well. For instance, very old brand names are preferred by many consumers, and enjoy a price premium. This premium holds even for commodities.”

People like what we like. People like repetition over logic. People are weird.

However, this environment is kinda weird. Normally we choose things for a reason, and if it’s because numbers represent our cat’s birthday then so-be-it.

People are weird, so let’s deal with it. Business owners, investors, and entrepreneurs alike should remember that people are messy and people are weird. We’ll give Irwin and Goodwin the final word: “our results suggest that, in general, trying to educate people away from these types of decisions will be difficult and not easily accomplished via logical arguments aimed at beliefs.”

Instead, try stories. It works for vino don’t you know.