When making decisions, aim to minimize the worst-case scenario (satisficing) rather than solely maximizing expected outcomes. Provide reliable signals that potential negative outcomes are unlikely or not severe, as people often prioritize avoiding disaster over achieving perfection.
Recognize that imagination and creative hypothesis generation are crucial for initial insights and breakthroughs, even if formal reasoning is used for justification. Cultivate environments that encourage diverse thinking and ‘climbing into more baths’ to generate novel explanations.
Be cautious of institutional decision-making that prioritizes ‘bogus rationality’ or ‘scientism’ to justify choices and avoid blame, rather than fostering genuine imagination and judgment. This artificial certainty can stifle innovation and lead to suboptimal outcomes.
When solving problems, consider changing behavior through psychological insights rather than defaulting to expensive infrastructure changes. Intangible solutions can be more cost-effective and lead to win-win outcomes, such as reducing airport security backlogs.
Implement commitment devices or costly signals (e.g., rigorous qualifications, significant upfront investment) to reliably signal honest intent and build trust. This demonstrates ‘skin in the game’ and commitment to a long-term relationship or quality.
Recognize that beyond objective qualities, creating psychological value (e.g., through interface design, context, or perception) is a legitimate and environmentally friendly way to generate value. Enhancing subjective enjoyment can be as impactful as improving objective features.
Define marketing as the costly signaling of faith in your future, where upfront investment that only pays off over time reliably indicates a business or individual playing the ‘repeat game.’ This commitment signals trustworthiness and a focus on long-term reputation.
Actively test counterintuitive ideas and hypotheses, especially when the cost of testing is low and the potential upside is high. Competitors are less likely to try these, leading to valuable discoveries and competitive advantage.
Create an organizational atmosphere where making slightly silly or unconventional suggestions is permissible and even encouraged. This psychological safety is essential for generating innovative ideas and avoiding a fear-driven environment that stifles creativity.
Recognize that humans are often post-rationalizing animals, inventing plausible narratives for emotional states or actions after the fact. Don’t always take stated reasons at face value when trying to understand or influence behavior.
Shift focus to the positive aspects of a situation or offering, even if they are inherent, to synthesize happiness and improve perception. For example, a pilot reframing a bus transfer as a benefit (less walking) can significantly improve passenger mood.
Provide diverse ways for customers to respond or purchase (e.g., phone, coupon, web page) as different people prefer different modes. Offering more options can significantly increase overall engagement and conversion rates.
When presenting options, especially to time-pressed individuals, limit the number of choices to reduce cognitive load and make decision-making easier. For example, promoting five flight destinations instead of 29 can increase bookings.
Understand that the perceived importance of a communication is often proportionate to the cost (financial, effort, creativity, scarcity) of its generation and transmission. Use this principle to make messages more impactful and convey seriousness.
For certain products, especially low-cost items, requiring customer effort (e.g., self-assembly, ‘pick your own’) can destigmatize the low price and increase perceived value and ownership. This taps into the ‘Ikea effect’ where personal investment boosts appreciation.
Acknowledge that many human interactions rely on unconscious social awareness and tolerance of ambiguity. Design systems (e.g., autonomous vehicles) to account for these nuances, as a lack of social intelligence can lead to unexpected failures in mixed environments.
When designing systems, especially autonomous ones, consider that humans will exploit predictability and lack of emotional response. The capacity for anger or unpredictability in human interaction serves as a deterrent against manipulation.
Recognize that complete rationality and efficiency can lead to predictability, making one vulnerable to exploitation. Some degree of ‘weirdness’ or unpredictability is evolutionarily advantageous and can deter others from taking advantage.
Recognize that people’s willingness to pay is influenced not just by the intrinsic value of a good but also by the context of the transaction. For example, people expect to pay more for an identical item from a ‘boutique hotel’ than a ‘beach shack.’
Price can serve as a navigation tool or a signal of quality; sometimes, increasing the price can increase demand. This is especially true for items where customers have a set expectation of what they want to spend or perceive higher price as higher value.
Understand that storytelling can add significant value to products, even those with objective qualities, as people often ‘drink the advertising’ or perceive value based on narrative and context. A compelling story can make a product magical.
Recognize that a brilliant product or invention can fail if badly marketed, akin to a Michelin-starred restaurant with bad ambiance. Invest in effective storytelling and context to ensure even objectively superior products succeed in the market.
Position new technologies or services as aspirational rather than merely a cheaper substitute for existing options. This framing can significantly impact adoption and perceived value, turning a ‘poor man’s alternative’ into a ‘rich man’s’ choice.
Understand that costly signaling (e.g., status, novelty) can provide essential early-stage funding and adoption for technologies that are initially inferior to existing solutions. This allows innovations to persevere through painful early stages until they mature.
In sales, focus on the next sale rather than just the immediate transaction, as playing the long game by prioritizing customer trust and satisfaction leads to greater overall success. A good salesperson thinks about selling the next car, not just the current one.
Understand that businesses with significant sunk costs (e.g., a permanent shop vs. a mobile van) are inherently more trustworthy. They have more to lose from damaging their reputation, signaling a commitment to the community and quality.
Recognize that an excessive focus on short-term targets and shareholder value can create ‘psychopathic businesses’ that consumers instinctively distrust. This approach often neglects long-term commitment and reputational investment.
In corporate settings, actively counter the tendency for blame-aversion and herding behavior, where individuals default to ‘safe’ or normative choices to avoid personal blame. This stifles innovation and optimal decision-making by discouraging imaginative solutions.
In business, prioritize actual results over the elegance or plausibility of reasons, as capitalism rewards what works, even if the underlying rationale is ‘bullshit’ or counterintuitive. A successful outcome validates the approach, regardless of initial reasoning.
For products intended to have a psychological or medicinal effect, a slightly unpleasant taste, high cost, or element of ‘mumbo jumbo’ can enhance the placebo effect and perceived efficacy. This ‘grit’ signals that the product is potent and worth the effort.
Conduct experiments where the cost of failure is small, allowing for quick abandonment if an idea doesn’t work, while still benefiting from potentially spectacular upsides. This agile approach is more valuable in the modern digital age than seeking artificial certainty.
When a resource (like vacation time) is scarce, people are more willing to pay a premium to ensure a high-quality experience. This is because they don’t want to ‘spoil the ship for a ha’porth of tar’ on a rare opportunity.
Understand that sales and discounts create a ‘hit’ of transaction utility, which can drive purchases even for items that aren’t perfectly suitable. This highlights the power of perceived savings in influencing buying behavior.
Be aware of status quo bias, where existing norms (like low vacation allowances) persist despite potential benefits from change. Questioning these norms can reveal opportunities for improved well-being and economic growth.
Consider how changes in work-life balance, such as increased vacation time, can stimulate broader economic activity. For example, Henry Ford created the two-day weekend to encourage car purchases and leisure spending.
Be aware that reading extensively for work can diminish the desire to read for pleasure. Consciously carve out time and mental space for enjoyable reading to maintain this valuable habit.
Be cautious of replacing human roles with technology by only addressing the most obvious function. Complex evolved systems often have multiple, less salient purposes that technology may not replicate, leading to unforeseen gaps.
Evaluate the impact of communication friction; while modern tools aim for instantaneous, free communication, friction (like typing pools) can reduce superfluous messages and subtly shift power dynamics, potentially improving overall communication quality.
When making purchasing decisions, especially for high-value items, instinctively rely on social intelligence to assess the seller’s honesty and reputational vulnerability. Buying from someone known to a trusted contact, for instance, can reduce perceived risk.
Be aware that people often choose and express opinions to signal tribal loyalty, focusing on issues that annoy opposing groups rather than seeking consensus or optimal solutions. Understanding this dynamic is crucial for navigating political and social discourse.