Trusting Feelings Over Facts
April 2020 - A study from The University of Texas at Arlington reveals that when people feel anxious and vulnerable they are more likely to base their decision-making on anecdotal information instead of facts .
The study, titled "When poignant stories outweigh cold hard facts: A meta-analysis of the anecdotal bias" is published in Organizational Behavior and Human Decision Processes.
According to Traci Freling, one of the study authors:
"We found that people are more likely to consider personal anecdotes than fact-based information, especially when it deals with medical emergencies. This has a high importance in the current environment, where everyone is concerned about the coronavirus."
She contended that people are more likely to listen to personal stories rather than facts because emotions run high during medical emergencies such as the COVID-19 pandemic.
"They are especially dismissive of facts if the incident is something they personally experienced. Specifically, we show that when an issue is health-related, personally relevant or highly threatening, then decision-making is compromised and people tend to rely on anecdotes."
Traci Freling cited the run on toilet paper buying early in the COVID-19 pandemic as an illustration of decisions not being based on facts. It seems that consumers feeling vulnerable to a specific problem may give preference to subjective, anecdotal information rather than objective, statistical facts when making decisions. Conversely, when people were not emotionally engaged in a decision,statistical evidence is weighed more heavily. According to Traci Freling:
"Primarily, when there is low-threat severity or it's a non-health issue, people tend to take cold, hard facts into account rather than personal accounts and stories."
Co-author Ritesh Saini also observed that people make "more fact-based decisions when choosing for others, but become surprisingly irrational when choosing for self."
Dr. Ali Fenwick of Nyenrode Business University has attributed panic buying to the brain's survival mode overriding any rational decision making, Ali Fenwick points to four major reasonsfor bulk buying:
- Survival mode
The more primitive part of the brain takes over when people are placed in an uncertain or threatening situation. Irrationally, we are buying to 'survive' despite government assurances that there will be no shortage.
- The Scarcity Effect
As products disappear off the supermarket shelves, people see them as being scarce and more valuable. This builds a momentum in which they are more willing to go out and buy - perhaps paying more - for scare products which they might not actually need. Hence the excessive stockpiling of food and hoarding of toilet paper.
- Herd Behaviour
When people around you, such as friends, relatives or colleagues, are bulk buying there is a tendency to do the same.
- Sense of control
External constraints, such as the self-isolation, shutting of borders and lockdowns during the global pandemic cause a lot of uncertainty. Ali Fenwick argues that such external constraints create an internal need to exert personal control as a way of feelingl safe. The ability to buy things provides people with a sense of control over their surroundings - another factor leading to buying more is needed.
Ali Fenwick concludes:
"In summary, bulk buying is caused by various psychological and environmental cues which throw rational-thinking out of the window. When in survival mode, we let mainly our emotions drive decisions and are more susceptible to social influences. So, we will rush out and buy more because we believe others are doing the same."
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