TIP 022 : Influence - The Psychology of Persuasion - Robert Cialdini's Book (Investing Podcast)
Feb 15, 2015
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Author Robert Cialdini discusses the psychology of persuasion in his book 'Influence'. Topics include building commitments, social proof, authority's influence, and the importance of holding profitable stocks. The episode delves into practical strategies for becoming influential in business and avoiding negative influence.
Small commitments can lead to larger ones, social proof influences decision-making, scarcity enhances perceived value
Deep dives
The Power of Commitment and Consistency
Chaldini discusses the principle of commitment and consistency, emphasizing how small commitments can lead to larger ones. He illustrates this with examples of how people's desire to maintain consistency influences their decisions, citing instances from telemarketing tactics to personal commitments and their impact on behavior and decision-making.
Reciprocation and Obligation
Chaldini explores the concept of reciprocation, highlighting how people feel obligated to repay kindness or favors they receive, even if they don't necessarily like the person involved. He provides examples of how reciprocal actions can create a sense of indebtedness, influencing behavior and decisions in various social and professional contexts.
Social Proof and Influence
Chaldini delves into the idea of social proof, demonstrating how individuals are influenced by the actions and decisions of others, particularly in uncertain or unfamiliar situations. He presents scenarios where people conform to group behavior, drawing parallels between social proof and its impact on stock investing, everyday choices, and decision-making processes.
Authority and Influence on Decision Making
In the podcast, an experiment is discussed where boys were influenced by an authority figure's directive regarding playing with a robot toy. Initially, around 70% of boys refrained from playing with the toy when told not to by the authority. However, when the authority figure's influence was removed, the boys gravitated towards playing with the toy later on, showcasing short-term impact. Further iterations of the experiment revealed that when the authority figure provided reasoning and left the decision to the boys, a lasting influence was observed, where the majority continued to refrain from playing with the toy over time.
Impact of Scarcity Principle on Decision Making
Another key concept explored in the podcast is the scarcity principle's influence on human behavior. Using the example of a limited-time viewing of a new Mormon church, the podcast highlighted how scarcity can enhance perceived value and desirability. When something is scarce, people are more inclined to value it highly and feel driven to possess it, even if their initial interest was minimal. This principle extends to decision-making in various contexts, emphasizing the psychological impact of scarcity on individuals' choices and perceptions.
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