“I’m anal retentive. I’m a workaholic. I have insomnia. And I’m a control freak. That’s why I’m not married. Who could stand me?”
Imagine that you are driving to a meeting. You know that you are running a few minutes late, but if you speed just a little, you might be able to make the meeting on time. On your normal route, you see a line of cars waiting to turn into traffic. You know of another route which is slightly longer, but there’s no traffic. It’ll probably take longer to get there, but you won’t run into any traffic. The preferred route, where there’s the line of cars, will still probably be faster, but may be slower because you just never know which one of those cars is the person who drives 20 miles per hour under the speed limit.
Which do you choose? If you’re like me, you wind up choosing the route with no traffic. Yet, even as you make the choice, you probably think to yourself that it would have been faster to go the other way. Still, you choose the route where you can go faster, even if it’s a longer route because you feel like you’re going faster.
Monkey Brain is making this decision for you.
Is Seeking a Perception of Control Draining Your Wallet?
Monkey Brain enjoys being behind the wheel, so to speak. He wants to think that he has control of everything and that he’s getting a bargain. As a study in the journal Marketing Letters shows, people get more satisfaction when they feel like they have control over a situation. As much as you feel better taking the longer route just because you can drive faster, we feel better about having the perception of control, even if the longer-term outcomes are not actually better for us.
Marketers use this perception of control against us all the time. Have you heard the anecdote about the car salesman who, instead of telling you the price of a car, asks you instead what sort of payments you can afford? He’s using a psychological trick called perception distortion to manipulate you in bargaining. As Hal Varian, then of the University of Michigan, and now Google’s chief economist, demonstrated in this paper, if party A in a bargain can convince party B that party A wants some other outcome, then party A gains the advantage in bargaining.
Let’s see how this works in an example described in the aforementioned Marketing Letters:
A consumer is invited to customize the contract terms for an unsecured permanent credit line. She selects the most convenient monthly payment amounts and dates of payments, and she determines the maximum overdraft amount. While doing so, she overlooks the excessive 19% APR that comes with the additional control.
How is this working in real life? American Express ran a series of ads for a new business card where the main “benefit” of the credit card was that you got to choose whether or not you paid it all off at once or you were able to stretch the payments out over time. In providing this “convenience” for you, they “conveniently” forgot to mention all of the interest that you would be accruing if you decided to go for the “convenient” option of stretching out payments over time. They used perception distortion to make Monkey Brain think that you’d rather sit back, sipping piña coladas, and when a credit card bill came in, you’d think “ho, hum, just another bill,” when, in reality, you want to pay off the credit card bill when it comes in so that you don’t line the bank’s pockets with interest payments.
How can you fight back when Monkey Brain wants to take the wheel? Here are some suggestions:
- Remember your ultimate goal. You are most likely to give in to the immediate gratification of the perception of control when you forget what you’re trying to achieve in the long run. The moment your frontal cortex loses sight of the end goal, Monkey Brain will take over, wanting immediate gratification. So, as you choose the path which doesn’t feel like control, tell yourself that this is actually the way to get you where you’re going most quickly.
- Ask yourself what the other side truly wants. Be it a car dealer or a bank, chances are they want you to pay more money over time. However, they also want a happy and satisfied customer. You can use that to your advantage.
- Don’t buy bundled offerings if you don’t need them. We often fool ourselves into thinking that spending more is a bargain because we can save more on the average price when we buy the package. Cable companies do this quite often. They bundle together cable, Internet, and landline and sell it at a discount to what you could get if you bought the items separately. However, if you only need the Internet, the other two won’t do you any good. Their salespeople will work hard, though, to implement perception distortion to make you think that you need all three. Don’t give in.
- Give in when it doesn’t matter. If you’re a parent, how many times have you finally given in to an insistent child just to get him to be quiet? You’ve faced ego depletion. You can only say no to Monkey Brain so many times before he’s going to win. So, by allowing him to win when it doesn’t count, you restore your ability to say no on the times when it does matter.
Have you ever entered into a Faustian bargain simply because you thought control mattered? Tell us about it in the comments below!
- John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.
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