Effort Justification

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Effort justification is a psychological phenomenon that explains why individuals tend to assign greater value to outcomes or experiences that require significant effort or sacrifice. Rooted in cognitive dissonance theory, effort justification occurs when individuals rationalize their investment of time, energy, or resources into a task or goal by exaggerating its importance or desirability.

Key Components of Effort Justification

Perceived Significance

Effort justification hinges on individuals’ perception of the significance or importance of the task or goal they are pursuing. When individuals invest significant effort or sacrifice into a task, they are more likely to perceive the outcomes or rewards associated with it as valuable or desirable to justify their investment.

Cognitive Dissonance Reduction

Effort justification arises from the need to reduce cognitive dissonance, the psychological discomfort that arises from holding conflicting beliefs or attitudes. By exaggerating the value of outcomes or experiences associated with a task, individuals reconcile the inconsistency between the effort expended and the perceived value of the outcomes.

Self-Perception Theory

Effort justification is closely related to self-perception theory, which posits that individuals infer their attitudes and preferences based on their observed behaviors or actions. When individuals invest effort into a task, they interpret their commitment as evidence of their genuine interest or belief in the task’s importance, reinforcing their commitment and dedication.

Sunk Cost Fallacy

Effort justification may also be influenced by the sunk cost fallacy, the tendency to continue investing resources into a task or goal despite diminishing returns or unfavorable outcomes. Individuals may justify their continued investment of effort by emphasizing the importance of achieving the desired outcomes, even in the face of challenges or setbacks.

Social Comparison and Validation

Effort justification can be amplified through social comparison and validation processes, where individuals compare their efforts and achievements to those of others and seek validation or recognition for their contributions. By emphasizing the significance of their efforts, individuals seek affirmation from others and reinforce their commitment to the task or goal.

Strategies for Leveraging Effort Justification

Goal Setting and Commitment

Encourage individuals to set meaningful goals that align with their values, interests, and aspirations, fostering a sense of purpose and intrinsic motivation. By investing effort into pursuing meaningful goals, individuals are more likely to justify their commitment and perseverance in the face of challenges or obstacles.

Feedback and Recognition

Provide regular feedback and recognition to acknowledge individuals’ efforts and contributions, reinforcing their sense of accomplishment and value. By highlighting the significance of their efforts and achievements, individuals are more likely to perceive their contributions as meaningful and worthy of continued investment.

Intrinsic Rewards and Satisfaction

Promote intrinsic rewards and satisfaction derived from the process of engaging in tasks or activities, rather than solely focusing on external outcomes or rewards. By emphasizing the intrinsic value of the tasks themselves, individuals are more likely to derive satisfaction from their efforts and feel a sense of fulfillment and accomplishment.

Collaboration and Social Support

Facilitate collaboration and social support networks to foster a sense of belonging and connection among individuals pursuing common goals or objectives. By sharing experiences, resources, and support, individuals can validate their efforts and reinforce their commitment to collective success.

Reflection and Reframing

Encourage individuals to reflect on their efforts and achievements, reframing challenges as opportunities for growth and learning. By adopting a growth mindset and viewing setbacks as temporary obstacles, individuals can maintain motivation and resilience in the pursuit of their goals.

Benefits of Effort Justification

Enhanced Motivation and Commitment

Effort justification enhances motivation and commitment by reinforcing individuals’ belief in the significance and value of their efforts. By attributing greater importance to the outcomes associated with their efforts, individuals are more motivated to persist and overcome obstacles to achieve their goals.

Increased Satisfaction and Fulfillment

Effort justification leads to increased satisfaction and fulfillment as individuals derive meaning and purpose from their investment of effort into meaningful tasks or activities. By perceiving their efforts as valuable and worthwhile, individuals experience a sense of accomplishment and satisfaction in their achievements.

Improved Performance and Productivity

Effort justification boosts performance and productivity by fostering a sense of ownership and responsibility for tasks or projects. By investing effort into their work, individuals are more committed to achieving excellence and delivering results, leading to improved performance outcomes and organizational success.

Strengthened Relationships and Collaboration

Effort justification strengthens relationships and collaboration among individuals working towards common goals or objectives. By validating each other’s efforts and contributions, individuals foster trust, cohesion, and camaraderie, enhancing teamwork and collective achievement.

Challenges of Effort Justification

Overcommitment and Burnout

Effort justification may lead to overcommitment and burnout if individuals invest excessive effort into tasks or goals without considering their well-being or boundaries. Individuals may feel pressured to justify their efforts at the expense of their health, leading to stress, exhaustion, and diminished performance.

Ineffective Resource Allocation

Effort justification may result in ineffective resource allocation if individuals prioritize tasks based on perceived effort rather than strategic importance or impact. Businesses must ensure that resources are allocated efficiently and effectively to tasks or projects that align with organizational goals and priorities.

Risk of Confirmation Bias

Effort justification may reinforce confirmation bias, the tendency to seek out information that confirms existing beliefs or attitudes while ignoring contradictory evidence. Individuals may selectively interpret feedback or information to validate their efforts, overlooking areas for improvement or alternative perspectives.

Resistance to Change

Effort justification may create resistance to change if individuals become entrenched in their existing beliefs or behaviors due to their investment of effort. Businesses must promote a culture of adaptability and innovation to encourage individuals to embrace change and explore new opportunities for growth and development.

Implications of Effort Justification

Employee Engagement and Retention

Effort justification influences employee engagement and retention by fostering a sense of purpose, meaning, and fulfillment in the workplace. Businesses that recognize and validate employees’ efforts are more likely to attract and retain top talent committed to achieving organizational goals and driving success.

Organizational Culture and Values

Effort justification shapes organizational culture and values by reinforcing norms and behaviors that prioritize commitment, perseverance, and excellence. Businesses that promote a culture of effort justification cultivate a resilient and high-performing workforce dedicated to continuous improvement and innovation.

Leadership and Decision-Making

Effort justification informs leadership and decision-making processes by highlighting the importance of transparent communication, feedback, and recognition. Leaders who acknowledge and validate employees’ efforts are better equipped to inspire trust, motivation, and loyalty, driving organizational success and effectiveness.

Customer Engagement and Loyalty

Effort justification extends to customer engagement and loyalty by emphasizing the significance of customers’ investments of time, energy, and resources into products or services. Businesses that deliver exceptional value and experiences justify customers’ loyalty and advocacy, driving repeat purchases and long-term relationships.

Conclusion

  • Effort justification is a psychological phenomenon that explains why individuals assign greater value to outcomes or experiences that require significant effort or sacrifice.
  • Key components of effort justification include perceived significance, cognitive dissonance reduction, self-perception theory, sunk cost fallacy, and social comparison and validation.
  • Strategies for leveraging effort justification include goal setting and commitment, feedback and recognition, intrinsic rewards and satisfaction, collaboration and social support, and reflection and reframing.
  • Effort justification offers benefits such as enhanced motivation and commitment, increased satisfaction and fulfillment, improved performance and productivity, and strengthened relationships and collaboration.
  • However, effort justification also presents challenges such as overcommitment and burnout, ineffective resource allocation, risk of confirmation bias, and resistance to change.
  • Implementing effort justification has implications for employee engagement and retention, organizational culture and values, leadership and decision-making, and customer engagement and loyalty, shaping individuals’ commitment and satisfaction in various personal and professional contexts.
Related Frameworks, Models, or ConceptsDescriptionWhen to Apply
Confirmation Bias– Confirmation Bias is a cognitive bias where individuals tend to seek out, interpret, and remember information that confirms their existing beliefs or hypotheses, while ignoring or discounting contradictory evidence. – It leads to selective perception and reinforces preconceived notions, even in the face of conflicting information. – Confirmation Bias influences decision-making, problem-solving, and interpersonal interactions by shaping perceptions and judgments based on biased information processing.– Decision-Making: Confirmation Bias impacts decision-making processes by influencing how individuals evaluate options and make choices based on information that aligns with their existing beliefs. – Information Processing: It affects information processing by shaping how individuals interpret and remember information, leading to skewed perceptions and judgments.
Selective Exposure– Selective Exposure is a tendency to seek out information that aligns with one’s existing beliefs, attitudes, or preferences, while avoiding or ignoring contradictory information. – It creates filter bubbles and echo chambers in which individuals are exposed only to viewpoints that reinforce their own, leading to polarization and reinforcement of existing biases. – Selective Exposure influences media consumption, social interactions, and information-seeking behaviors by shaping the sources and types of information individuals encounter and engage with.– Media Consumption: Selective Exposure affects media consumption habits by influencing which news sources, websites, or social media content individuals choose to engage with based on their preferences and biases. – Social Media: It impacts social media interactions by shaping the content individuals see in their feeds and the communities they engage with online, reinforcing existing beliefs and attitudes.
Post-Purchase Rationalization– Post-Purchase Rationalization is a psychological phenomenon where individuals justify or rationalize a purchase decision after the fact, particularly when faced with buyer’s remorse or conflicting information. – It involves minimizing perceived negative aspects of the chosen option and emphasizing its positive attributes to alleviate cognitive dissonance. – Post-Purchase Rationalization influences consumer behavior, brand loyalty, and satisfaction by preserving a positive self-image and justifying past decisions.– Consumer Behavior: Post-Purchase Rationalization affects consumer behavior by influencing how individuals perceive and evaluate their purchases, reducing feelings of regret and increasing satisfaction with their decisions. – Marketing: It impacts marketing strategies by emphasizing positive aspects of products or services to reinforce consumers’ post-purchase rationalizations and encourage repeat purchases and brand loyalty.
Effort Justification– Effort Justification is a cognitive process where individuals attribute greater value to outcomes or rewards obtained through effort or sacrifice. – It occurs when individuals rationalize their investment of time, resources, or energy into a task or goal by inflating its importance or desirability. – Effort Justification influences motivation, commitment, and perseverance by reinforcing the belief that the effort expended was worthwhile and justified by the rewards obtained.– Motivation: Effort Justification enhances motivation by validating individuals’ efforts and commitment to achieving their goals, reinforcing their belief in the value of their actions. – Group Dynamics: It affects group dynamics by fostering cohesion and solidarity among members who have collectively invested effort into a shared task or objective, strengthening group identity and collaboration.
Sunk Cost Fallacy– Sunk Cost Fallacy is a cognitive bias where individuals continue investing resources, such as time, money, or effort, into a failing endeavor because of the investment already made, despite the likelihood of future losses. – It leads to irrational decision-making by prioritizing past investments over current or future outcomes. – Sunk Cost Fallacy influences business decisions, project management, and personal choices by perpetuating commitment to failing endeavors and preventing rational evaluation of alternatives.– Project Management: Sunk Cost Fallacy affects project management decisions by hindering the abandonment of failing projects or initiatives due to the perceived loss of past investments. – Personal Finance: It impacts personal finance decisions by leading individuals to continue investing in underperforming assets or ventures to avoid realizing losses already incurred, despite better opportunities elsewhere.
Cognitive Dissonance Reduction– Cognitive Dissonance Reduction refers to strategies individuals use to alleviate discomfort or tension resulting from conflicting beliefs, attitudes, or behaviors. – It involves changing one’s attitudes, beliefs, or behaviors to restore consistency and reduce cognitive dissonance. – Cognitive Dissonance Reduction influences self-perception, decision-making, and attitude change processes by promoting psychological comfort and restoring cognitive consistency.– Attitude Change: Cognitive Dissonance Reduction facilitates attitude change by motivating individuals to align their beliefs and behaviors to reduce discomfort and restore cognitive consistency. – Behavior Change: It influences behavior change processes by encouraging individuals to modify their actions or decisions to align with their beliefs or attitudes, reducing cognitive dissonance and promoting psychological well-being.
Self-Affirmation Theory– Self-Affirmation Theory posits that individuals seek to maintain a positive self-image and self-integrity by affirming their core values, strengths, or identities. – It involves focusing on personal strengths or achievements to bolster self-esteem and reduce psychological threats or challenges. – Self-Affirmation Theory influences coping strategies, resilience, and well-being by promoting self-confidence and psychological resilience in the face of adversity or cognitive dissonance.– Stress Management: Self-Affirmation Theory aids in stress management by fostering self-confidence and resilience, reducing the impact of psychological threats or challenges on individuals’ well-being. – Health Behavior Change: It supports health behavior change by enhancing individuals’ self-efficacy and motivation to adopt healthier lifestyles, even in the presence of cognitive dissonance or conflicting beliefs.
Social Comparison Theory– Social Comparison Theory proposes that individuals evaluate themselves by comparing their abilities, opinions, or traits with those of others. – It involves upward comparison with individuals perceived as superior and downward comparison with those perceived as inferior. – Social Comparison Theory influences self-perception, identity formation, and motivation by providing reference points for evaluating oneself and managing self-esteem.– Self-Evaluation: Social Comparison Theory affects self-evaluation processes by providing benchmarks and standards against which individuals assess their abilities, achievements, and worth. – Motivation: It influences motivation by shaping individuals’ perceptions of competence and success relative to others, driving efforts to maintain or improve their standing in comparison to peers or reference groups.
Attribution Theory– Attribution Theory examines how individuals interpret and explain the causes of events or behaviors, whether they attribute them to internal factors (e.g., personality, ability) or external factors (e.g., situation, luck). – It influences perceptions of responsibility, accountability, and control over outcomes by shaping causal attributions. – Attribution Theory affects social judgments, interpersonal relationships, and self-esteem by attributing success or failure to specific causes, which in turn influences future behavior and attitudes.– Interpersonal Relationships: Attribution Theory impacts interpersonal relationships by shaping individuals’ perceptions of responsibility and blame in social interactions, influencing relationship dynamics and conflict resolution strategies. – Self-Perception: It influences self-perception by attributing success or failure to internal or external factors, which affects individuals’ self-esteem, motivation, and future behavior.

Connected Thinking Frameworks

Convergent vs. Divergent Thinking

convergent-vs-divergent-thinking
Convergent thinking occurs when the solution to a problem can be found by applying established rules and logical reasoning. Whereas divergent thinking is an unstructured problem-solving method where participants are encouraged to develop many innovative ideas or solutions to a given problem. Where convergent thinking might work for larger, mature organizations where divergent thinking is more suited for startups and innovative companies.

Critical Thinking

critical-thinking
Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.

Biases

biases
The concept of cognitive biases was introduced and popularized by the work of Amos Tversky and Daniel Kahneman in 1972. Biases are seen as systematic errors and flaws that make humans deviate from the standards of rationality, thus making us inept at making good decisions under uncertainty.

Second-Order Thinking

second-order-thinking
Second-order thinking is a means of assessing the implications of our decisions by considering future consequences. Second-order thinking is a mental model that considers all future possibilities. It encourages individuals to think outside of the box so that they can prepare for every and eventuality. It also discourages the tendency for individuals to default to the most obvious choice.

Lateral Thinking

lateral-thinking
Lateral thinking is a business strategy that involves approaching a problem from a different direction. The strategy attempts to remove traditionally formulaic and routine approaches to problem-solving by advocating creative thinking, therefore finding unconventional ways to solve a known problem. This sort of non-linear approach to problem-solving, can at times, create a big impact.

Bounded Rationality

bounded-rationality
Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

Dunning-Kruger Effect

dunning-kruger-effect
The Dunning-Kruger effect describes a cognitive bias where people with low ability in a task overestimate their ability to perform that task well. Consumers or businesses that do not possess the requisite knowledge make bad decisions. What’s more, knowledge gaps prevent the person or business from seeing their mistakes.

Occam’s Razor

occams-razor
Occam’s Razor states that one should not increase (beyond reason) the number of entities required to explain anything. All things being equal, the simplest solution is often the best one. The principle is attributed to 14th-century English theologian William of Ockham.

Lindy Effect

lindy-effect
The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.

Antifragility

antifragility
Antifragility was first coined as a term by author, and options trader Nassim Nicholas Taleb. Antifragility is a characteristic of systems that thrive as a result of stressors, volatility, and randomness. Therefore, Antifragile is the opposite of fragile. Where a fragile thing breaks up to volatility; a robust thing resists volatility. An antifragile thing gets stronger from volatility (provided the level of stressors and randomness doesn’t pass a certain threshold).

Ergodicity

ergodicity
Ergodicity is one of the most important concepts in statistics. Ergodicity is a mathematical concept suggesting that a point of a moving system will eventually visit all parts of the space the system moves in. On the opposite side, non-ergodic means that a system doesn’t visit all the possible parts, as there are absorbing barriers

Systems Thinking

systems-thinking
Systems thinking is a holistic means of investigating the factors and interactions that could contribute to a potential outcome. It is about thinking non-linearly, and understanding the second-order consequences of actions and input into the system.

Vertical Thinking

vertical-thinking
Vertical thinking, on the other hand, is a problem-solving approach that favors a selective, analytical, structured, and sequential mindset. The focus of vertical thinking is to arrive at a reasoned, defined solution.

Metaphorical Thinking

metaphorical-thinking
Metaphorical thinking describes a mental process in which comparisons are made between qualities of objects usually considered to be separate classifications.  Metaphorical thinking is a mental process connecting two different universes of meaning and is the result of the mind looking for similarities.

Maslow’s Hammer

einstellung-effect
Maslow’s Hammer, otherwise known as the law of the instrument or the Einstellung effect, is a cognitive bias causing an over-reliance on a familiar tool. This can be expressed as the tendency to overuse a known tool (perhaps a hammer) to solve issues that might require a different tool. This problem is persistent in the business world where perhaps known tools or frameworks might be used in the wrong context (like business plans used as planning tools instead of only investors’ pitches).

Peter Principle

peter-principle
The Peter Principle was first described by Canadian sociologist Lawrence J. Peter in his 1969 book The Peter Principle. The Peter Principle states that people are continually promoted within an organization until they reach their level of incompetence.

Straw Man Fallacy

straw-man-fallacy
The straw man fallacy describes an argument that misrepresents an opponent’s stance to make rebuttal more convenient. The straw man fallacy is a type of informal logical fallacy, defined as a flaw in the structure of an argument that renders it invalid.

Google Effect

google-effect
The Google effect is a tendency for individuals to forget information that is readily available through search engines. During the Google effect – sometimes called digital amnesia – individuals have an excessive reliance on digital information as a form of memory recall.

Streisand Effect

streisand-effect
The Streisand Effect is a paradoxical phenomenon where the act of suppressing information to reduce visibility causes it to become more visible. In 2003, Streisand attempted to suppress aerial photographs of her Californian home by suing photographer Kenneth Adelman for an invasion of privacy. Adelman, who Streisand assumed was paparazzi, was instead taking photographs to document and study coastal erosion. In her quest for more privacy, Streisand’s efforts had the opposite effect.

Compromise Effect

compromise-effect
Single-attribute choices – such as choosing the apartment with the lowest rent – are relatively simple. However, most of the decisions consumers make are based on multiple attributes which complicate the decision-making process. The compromise effect states that a consumer is more likely to choose the middle option of a set of products over more extreme options.

Butterfly Effect

butterfly-effect
In business, the butterfly effect describes the phenomenon where the simplest actions yield the largest rewards. The butterfly effect was coined by meteorologist Edward Lorenz in 1960 and as a result, it is most often associated with weather in pop culture. Lorenz noted that the small action of a butterfly fluttering its wings had the potential to cause progressively larger actions resulting in a typhoon.

IKEA Effect

ikea-effect
The IKEA effect is a cognitive bias that describes consumers’ tendency to value something more if they have made it themselves. That is why brands often use the IKEA effect to have customizations for final products, as they help the consumer relate to it more and therefore appending to it more value.

Ringelmann Effect 

Ringelmann Effect
The Ringelmann effect describes the tendency for individuals within a group to become less productive as the group size increases.

The Overview Effect

overview-effect
The overview effect is a cognitive shift reported by some astronauts when they look back at the Earth from space. The shift occurs because of the impressive visual spectacle of the Earth and tends to be characterized by a state of awe and increased self-transcendence.

House Money Effect

house-money-effect
The house money effect was first described by researchers Richard Thaler and Eric Johnson in a 1990 study entitled Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice. The house money effect is a cognitive bias where investors take higher risks on reinvested capital than they would on an initial investment.

Heuristic

heuristic
As highlighted by German psychologist Gerd Gigerenzer in the paper “Heuristic Decision Making,” the term heuristic is of Greek origin, meaning “serving to find out or discover.” More precisely, a heuristic is a fast and accurate way to make decisions in the real world, which is driven by uncertainty.

Recognition Heuristic

recognition-heuristic
The recognition heuristic is a psychological model of judgment and decision making. It is part of a suite of simple and economical heuristics proposed by psychologists Daniel Goldstein and Gerd Gigerenzer. The recognition heuristic argues that inferences are made about an object based on whether it is recognized or not.

Representativeness Heuristic

representativeness-heuristic
The representativeness heuristic was first described by psychologists Daniel Kahneman and Amos Tversky. The representativeness heuristic judges the probability of an event according to the degree to which that event resembles a broader class. When queried, most will choose the first option because the description of John matches the stereotype we may hold for an archaeologist.

Take-The-Best Heuristic

take-the-best-heuristic
The take-the-best heuristic is a decision-making shortcut that helps an individual choose between several alternatives. The take-the-best (TTB) heuristic decides between two or more alternatives based on a single good attribute, otherwise known as a cue. In the process, less desirable attributes are ignored.

Bundling Bias

bundling-bias
The bundling bias is a cognitive bias in e-commerce where a consumer tends not to use all of the products bought as a group, or bundle. Bundling occurs when individual products or services are sold together as a bundle. Common examples are tickets and experiences. The bundling bias dictates that consumers are less likely to use each item in the bundle. This means that the value of the bundle and indeed the value of each item in the bundle is decreased.

Barnum Effect

barnum-effect
The Barnum Effect is a cognitive bias where individuals believe that generic information – which applies to most people – is specifically tailored for themselves.

Anchoring Effect

anchoring-effect
The anchoring effect describes the human tendency to rely on an initial piece of information (the “anchor”) to make subsequent judgments or decisions. Price anchoring, then, is the process of establishing a price point that customers can reference when making a buying decision.

Decoy Effect

decoy-effect
The decoy effect is a psychological phenomenon where inferior – or decoy – options influence consumer preferences. Businesses use the decoy effect to nudge potential customers toward the desired target product. The decoy effect is staged by placing a competitor product and a decoy product, which is primarily used to nudge the customer toward the target product.

Commitment Bias

commitment-bias
Commitment bias describes the tendency of an individual to remain committed to past behaviors – even if they result in undesirable outcomes. The bias is particularly pronounced when such behaviors are performed publicly. Commitment bias is also known as escalation of commitment.

First-Principles Thinking

first-principles-thinking
First-principles thinking – sometimes called reasoning from first principles – is used to reverse-engineer complex problems and encourage creativity. It involves breaking down problems into basic elements and reassembling them from the ground up. Elon Musk is among the strongest proponents of this way of thinking.

Ladder Of Inference

ladder-of-inference
The ladder of inference is a conscious or subconscious thinking process where an individual moves from a fact to a decision or action. The ladder of inference was created by academic Chris Argyris to illustrate how people form and then use mental models to make decisions.

Goodhart’s Law

goodharts-law
Goodhart’s Law is named after British monetary policy theorist and economist Charles Goodhart. Speaking at a conference in Sydney in 1975, Goodhart said that “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure.

Six Thinking Hats Model

six-thinking-hats-model
The Six Thinking Hats model was created by psychologist Edward de Bono in 1986, who noted that personality type was a key driver of how people approached problem-solving. For example, optimists view situations differently from pessimists. Analytical individuals may generate ideas that a more emotional person would not, and vice versa.

Mandela Effect

mandela-effect
The Mandela effect is a phenomenon where a large group of people remembers an event differently from how it occurred. The Mandela effect was first described in relation to Fiona Broome, who believed that former South African President Nelson Mandela died in prison during the 1980s. While Mandela was released from prison in 1990 and died 23 years later, Broome remembered news coverage of his death in prison and even a speech from his widow. Of course, neither event occurred in reality. But Broome was later to discover that she was not the only one with the same recollection of events.

Crowding-Out Effect

crowding-out-effect
The crowding-out effect occurs when public sector spending reduces spending in the private sector.

Bandwagon Effect

bandwagon-effect
The bandwagon effect tells us that the more a belief or idea has been adopted by more people within a group, the more the individual adoption of that idea might increase within the same group. This is the psychological effect that leads to herd mentality. What in marketing can be associated with social proof.

Moore’s Law

moores-law
Moore’s law states that the number of transistors on a microchip doubles approximately every two years. This observation was made by Intel co-founder Gordon Moore in 1965 and it become a guiding principle for the semiconductor industry and has had far-reaching implications for technology as a whole.

Disruptive Innovation

disruptive-innovation
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Value Migration

value-migration
Value migration was first described by author Adrian Slywotzky in his 1996 book Value Migration – How to Think Several Moves Ahead of the Competition. Value migration is the transferal of value-creating forces from outdated business models to something better able to satisfy consumer demands.

Bye-Now Effect

bye-now-effect
The bye-now effect describes the tendency for consumers to think of the word “buy” when they read the word “bye”. In a study that tracked diners at a name-your-own-price restaurant, each diner was asked to read one of two phrases before ordering their meal. The first phrase, “so long”, resulted in diners paying an average of $32 per meal. But when diners recited the phrase “bye bye” before ordering, the average price per meal rose to $45.

Groupthink

groupthink
Groupthink occurs when well-intentioned individuals make non-optimal or irrational decisions based on a belief that dissent is impossible or on a motivation to conform. Groupthink occurs when members of a group reach a consensus without critical reasoning or evaluation of the alternatives and their consequences.

Stereotyping

stereotyping
A stereotype is a fixed and over-generalized belief about a particular group or class of people. These beliefs are based on the false assumption that certain characteristics are common to every individual residing in that group. Many stereotypes have a long and sometimes controversial history and are a direct consequence of various political, social, or economic events. Stereotyping is the process of making assumptions about a person or group of people based on various attributes, including gender, race, religion, or physical traits.

Murphy’s Law

murphys-law
Murphy’s Law states that if anything can go wrong, it will go wrong. Murphy’s Law was named after aerospace engineer Edward A. Murphy. During his time working at Edwards Air Force Base in 1949, Murphy cursed a technician who had improperly wired an electrical component and said, “If there is any way to do it wrong, he’ll find it.”

Law of Unintended Consequences

law-of-unintended-consequences
The law of unintended consequences was first mentioned by British philosopher John Locke when writing to parliament about the unintended effects of interest rate rises. However, it was popularized in 1936 by American sociologist Robert K. Merton who looked at unexpected, unanticipated, and unintended consequences and their impact on society.

Fundamental Attribution Error

fundamental-attribution-error
Fundamental attribution error is a bias people display when judging the behavior of others. The tendency is to over-emphasize personal characteristics and under-emphasize environmental and situational factors.

Outcome Bias

outcome-bias
Outcome bias describes a tendency to evaluate a decision based on its outcome and not on the process by which the decision was reached. In other words, the quality of a decision is only determined once the outcome is known. Outcome bias occurs when a decision is based on the outcome of previous events without regard for how those events developed.

Hindsight Bias

hindsight-bias
Hindsight bias is the tendency for people to perceive past events as more predictable than they actually were. The result of a presidential election, for example, seems more obvious when the winner is announced. The same can also be said for the avid sports fan who predicted the correct outcome of a match regardless of whether their team won or lost. Hindsight bias, therefore, is the tendency for an individual to convince themselves that they accurately predicted an event before it happened.

Read Next: Biases, Bounded Rationality, Mandela Effect, Dunning-Kruger Effect, Lindy Effect, Crowding Out Effect, Bandwagon Effect.

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