Cognitive Biases &

Lollapalooza Effect

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List of 21 cognitive biases
1. Deprival Superreaction Tendency or Scarcity
2. Reward & Punishment Superresponse Tendency
3. Liking/Loving Tendency
4. Disliking/Hating Tendency
5. Contrast-Misreaction Tendency
6. Reciprocation Tendency
7. Kantian Fairness Tendency
8. Inconsistency-Avoidance Tendency
9. Doubt-Avoidance Tendency
10. Influence-from-Mere Association Tendency
11. Simple, Pain-Avoidance Psychological Denial
12. Excessive Self-Regard Tendency

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List of 21 cognitive biases
13. Overoptimism Tendency
14. Social-Proof Tendency
15. Curiosity Tendency
16. Stress-Influence Tendency
17. Availability-Misweighing tendency
18. Authority-Misinfluence Tendency
19. Twaddle Tendency
20. Reason-Respecting Tendency
21. Lollapalooza Tendency

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Lollapalooza Tendency

2000-7000 ads/day

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Lollapalooza Tendency
What happen in auction:
• Scarcity
• Social bias
• Availability
• Reward
Warren Buffett

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NEXT
Deprival Superreaction
Tendency or Scarcity

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Deprival Superreaction
Tendency or Scarcity

The way to love anything, is to realize it might

be lost.

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Definition:
We want those things more that we
think we may not have access to
them anymore.

Auction:
• Going once
• Going twice
• Going three times

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Purdue University:

normal Age limit

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Playing chess:

Online business class

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Reward 1
Reward 2
Reward 3
Reward 4
Reward 5

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Power up:
We will find a piece of information
more persuasive, if we think that we
can’t get it elsewhere.

Exclusive information = more persuasive

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Psychologists:

• Timothy Broke
• Howard Fromkin

Booking.com email

Normal sales pitch Normal sales pitch Normal sales pitch

Scarcity Scarcity
Exclusive information

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We will practice a lot more
after you learn more biases

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NEXT
Reward & Punishment Bias

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Reward & Punishment
Superresponse Tendency

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Definition:
Reward is what customers will
receive after using your product.

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Online Marketing Course:

Features: you will learn

• marketing planning
• cognitive biases
• social media marketing
• …

Rewards: you will be able to

• find job in any company
• Increase sale in your own business and make more
money
• Start a marketing firm and do marketing for other
companies
• Win deals
• …

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No Sale?
Increase the reward
Always ask yourself, What is the
end game of using my product?

10x your reward, then you will

make real money.

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Punishment

Definition:
Punishment is what customers will
receive if they don’t use your product.

I wake you up at the middle of the night:

• Wake up there is a bag of 1 million dollar outside the door Reward

• Wake up the house is on fire Punishment

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Example:
Makeup store

Next bias:
Liking/Loving Tendency

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Liking/Loving
Tendency

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Clarence Darrow:
The main work of the trail attorney
is to make the jury like his client.

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Definition:
We prefer to say YES to
people we like.

People buy from likable person.

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Joe Girard His achievements are:
• The number 1 salesman for 12 years.
• Having sold 13,001 cars at
a Chevrolet dealership
• Recording his name in Guinness world
records as the world's greatest salesman

How he made it?

• Fair price
• Someone they like

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You don’t need to be very smart
Just use the right tools

How to become likeable?

• Physical attractiveness
• Similarities (personality, look , background,
experience, …)
• Complements

How many times you thanked your customer constantly

and told them you like them?

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Kevin Hart

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Disliking/Hating
Tendency

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Contrast bias

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Contrast-Misreaction
Tendency

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Car dealership:
Americans spend $33,000
on average on a car

Monthly payment for the car : $300 $25,000 - - - $30

Monthly payment for stereo : $30 $25,000 - - - $1800

$25,000

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 <

My product Coffee
Price: $50/m Price: $3-$4
Price: $120/m

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Definition:
Compare two things in the favor of your
product

• apple – apple
• apple – orange

Compare
Bad Big Element – Good Small Element

YouTube ads

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Examples:
• My mentor’s product

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Reciprocation
Tendency

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Reciprocation
Tendency

Kantian Fairness
Tendency

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Ralph Waldo Emerson:
“Pay every debt, like god wrote the bill”

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Definition:
We should try to repay in kind what an
other person has provided us.

Birthday gift
Party
…

Reciprocation = Kantian fairness

Kantian fairness: Keeping the fair level in

different situations.
You can’t ask people to buy your product
Reciprocation: It’s about giving and receiving. If you haven’t done anything for them

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Sam Walton

give
People

3 to 1
things action

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Ryan Dice

200,000 knives
Bought price: $10 each
Potential selling price:
$50-$60
$20 $20
$60

Free Knife
Only pay for shipping
$20 $20

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Rejection & retreat(RR):
Show the value

Customer
reject

Retreat Customer accept Increase the expectations

By offering high

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Ryan Dice

$100 We will practice in

$60
online market soon
Free Knife
Only pay for shipping
$20 $20

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Inconsistency
Avoidance
Tendency

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Inconsistency
Avoidance
Tendency

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Leonardo Da Vinci:
“It is easier to resist at the
beginning than at the end.”

Research:
People after betting on horses, will
be more sure they are going to win

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Ryan Dice

$100 Because of the process

$60 customers resist less
Free Knife
Only pay for shipping
$20 $20

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Car dealership:
First price is $400 less than other places
Then the $400 will be added at the end.

Low ball Research done on frogs

about consistency in the
Start with lower price process
then increase it as
process start.

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Example:
Booking.com

Next
Exercise

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Doubt-Avoidance
Tendency

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Definition:
Remove doubt from customer’s mind.

First you should remove doubt from your

mind. If customer feel doubt in you, you
cannot sell your product.

Second put yourself in your customer’s

shoes and find what are their doubts
about buying your product.

A confuse mind Examples: Udemy refund policy

Meat production factory
doesn’t buy

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Next
Influence-from-Mere
Association Tendency

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Excessive Self-Regard
Tendency

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Definition:
People see themselves more and
better than what they really are.

Sweden: 70% of people think their

driving skill is above average.
Make people feel good
Example: When people go shopping about themselves
and the salesperson tell them
how beautiful they look.

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Next
Overoptimism Tendency

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Overoptimism
Tendency

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Definition:
Showing a very good image about
future, after they buy your product.

Example: 60% of Americans are

overweight. Weight loss pill

Donald Trump – you will win

So much …

Marketing course

Overoptimism is something between reward &

Pain avoidance and mostly it’s not going to happen.

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Next
Social-Proof Tendency

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Social-Proof
Tendency

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Definition:
In situations that people don’t know
what to do, they will look at others.

In association tendency people look at

a popular person or element but here
people will look at majority.

Example: Horse betting

Traffic light
Auction
Video about social proof
Online market

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Next
Curiosity Tendency

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Curiosity
Tendency

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Definition:
Your business, your ads, you website
and … must always create constant
amount of curiosity.

In your marketing avoid saying things

that people already know, it will kill
curiosity.

Your customer must always feel that

there is more to come back.

• More on your YouTube channel

• More on your website
• More on your emails
• …

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Why we must have curiosity
tendency in our business?

cost of new customer = What they pay

Profit = repeatable customer

To stay profitable you must bring

people back to your business and to do
that you need curiosity tendency.

Helen fisher: There are a lot of things Udemy announcements

important in relationship, but
what keeps people attracted
to each other is mystery.

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Next
Stress-Influence Tendency

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Stress-Influence
Tendency

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Definition:
Keep the pressure on the customer till
they accept the deal.

Car salesman: When they say I have to

talk with the manager,
they usually go back and
drink coffee and leave
you there for 20 30 min.

Example: • Changing the company’s

documents. Paying is easy
• Waiting in lobby. Refunding is hard

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Next
Availability-Misweighing
tendency

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Availability
Misweighing
tendency

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Definition:
Anything that you want people to do
for you must be available for them
from every angle.

Examples: Sales on website

Information
Fast food
Let’s go online

Grandma theory
Understanding complicated things or If an old person doesn’t understand
doing extra steps need more energy and your theory, then it is wrong and you
our brain will block it. must change it.

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A confused mind
Doesn’t buy

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Next
Authority-Misinfluence Tendency

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Authority
Misinfluence
Tendency

Fallowing an expert!

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Story about my own life

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Definition:
Convincing people by position,
rank, title and etc.

Examples: Coach in the gym Real state

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Toothpaste commercials

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Next
Twaddle Tendency

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Twaddle
Tendency

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Definition:
People get convinced easier if
they get more and more.

Examples: Online courses

Your website
Social media
…

Remember not to make it People want to see more

crowded or complicated and more from your product

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Next
Reason-Respecting Tendency

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Reason
Respecting
Tendency

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Definition:
Everybody need a reason to buy
your product, and you just have
to give it to them.

Chieldini’s book - influence

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Definition:
Everybody need a reason to buy
your product, and you just have
to give it to them.

Chieldini’s book - influence

Version 1: No reason
Version 2: “Sorry I have to cut in line”

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How is this a good reason?
It’s not, it’s a moronic reason.

Even a moronic reason

is better than nothing.

My next door neighbor

is selling donuts
cheaper & and you
can get it from him,
but then you are not
buying from me. $1.50 $0.50
Come buy donuts
from me.
I’m Awesome

My shop My neighbor

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 Formula for reason
respecting tendency:

[ your product weakness ] [ my donuts are more

+ expensive than next door ]
+
[ why to buy from you ] [ but they are very tasty &
(reward/punishment bias)
healthy ]
+ +
[ Call to action ] [ So come and buy your
Donuts from me. ]

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Example from Elfsight’s mail

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Next
Exercise

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Influence-from-Mere
Association Tendency

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Michael Jackson
Definition:
Use something famous or popular to
introduce your product.
• A celebrity
• A famous place
• A popular character
• The flag of countries
Something that people love and care about.
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Examples:
Celebrity commercials
YouTube
Shout outs

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Next
Simple, Pain-Avoidance
Psychological Denial

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