We often believe we make rational decisions.
We are utterly convinced of it, and we justify every action with the reason we believe lies behind it.
And yet neuroscience says otherwise. It has done so for decades.
Every time we buy something we had not planned to, every time we choose the middle subscription, every time we add to the basket because there are ‘only a few left’: in those moments, our brain has run a function that is not entirely our own. Someone else built it.
Cognitive biases are evolutionary shortcuts, and they are part of Bliss Agency’s marketing advisory: mechanisms the brain developed to make quick decisions without consuming too many resources. They work well in nature. In a market designed to exploit them, however, they produce decisions that do not always match our own interests.
The brands that have grasped this are building operations that work precisely because our brain does not evaluate: it reacts. Here are the best-known cases.
1. The anchoring effect: the first number always wins
When Steve Jobs unveiled the iPad in 2010, the first thing he did was project a figure on stage.
999 dollars.
“How much should you pay for a device like this?” he asked.
Then he brought the slide down.
499 dollars.
The room erupted in thunderous applause. Enthusiasm, excitement, astonishment. The sale was already made; the catch was that the iPad was never going to cost 999 dollars.
The anchoring effect, studied by Daniel Kahneman and Amos Tversky in the 1970s, describes the brain’s tendency to use the first number it encounters as the reference point for all subsequent judgements. In what has become a classic experiment, participants were asked to estimate the number of African countries in the UN after spinning a rigged wheel of fortune. Those who had seen the number 65 gave higher estimates than those who had seen the number 10, even though they knew the wheel was random.
The anchor skews judgement even when it is plainly arbitrary.
The Williams-Sonoma case is the most cited in marketing. The company had launched a $275 bread maker that wasn’t selling. The solution the advertising team came up with was not to lower the price but to introduce a more expensive version at $415. Sales of the first machine immediately doubled. It had not become better value, but it looked it. And next to the expensive anchor, the cheaper option looked like good value to everyone.
2. The decoy effect: the product you don’t want to sell
Behavioural economist Dan Ariely analysed a real offer from the weekly The Economist: digital-only subscription at $59, print-only subscription at $125, digital + print subscription at $125.
Nobody chose the print-only option, of course. After all, what was the point?
Ariely had 100 MIT students fill in the questionnaire. Without the useless option, 68% chose digital only. With the useless option, 84% chose the combo at 125 dollars. The print-only subscription was not there to be sold: it was there to make the combo look like an extraordinary bargain. It was a decoy, pure and simple.
The same logic applies to cinema menus: the medium popcorn is almost always a decoy. It costs slightly less than the large, but proportionally far more than the small. It exists to make the large feel like the most rational choice. Faced with three options, the brain almost always settles on the second or the third. A clear design choice.
3. Loss aversion: losing hurts more than winning pleases
Kahneman and Tversky showed that losses have roughly twice the emotional impact of equivalent gains. Losing 50 euros hurts more than gaining 50 pleases. Economic rationality says they should weigh the same. The brain thinks otherwise.
Insurance marketing lives on this mechanism. Insurers do not sell protection: they sell loss avoidance. “Protect what you have built” works better than “get cover” because it triggers the loss circuit.
In 2012, Snapchat built its business model on this logic: messages disappear, so you had better view them straight away. Ephemeral content generates fear of loss, which generates engagement. The same holds true for Instagram and its stories.
4. Scarcity: the rare is precious, the precious is rare
In 1994, Supreme opened a skateboard shop in New York. New products came out every Thursday. Limited quantities, no restocks. Anyone who did not buy that day lost the chance for good. That model, now known as the drop model, has become one of the most copied brand mechanisms in recent history: Adidas Yeezy, Nike Jordan, IKEA’s limited collaborations. And the TCG world, above all.
The scarcity paradox rests on the assumption that limited availability of a product increases its perceived value, regardless of its objective features. The brain reads rarity as a signal of quality. This makes sense in nature, where rare resources tend to be valuable. In a market where scarcity is built artificially, the mechanism finds its fullest expression.
McDonald’s used this logic with the McRib for thirty years. Anyone who has tried it knows the product is nothing exceptional, but the fact that it appeared on and disappeared from menus unpredictably always generated huge mobilisation. So even if the scarcity is managed rather than real, the result it produces is very real indeed. Indeed, even today, when the McRib returns, endless queues form.
5. The endowment effect: it’s mine, so it’s worth more
According to Thaler, people place a higher value on objects they already own than on the same objects they could buy. In a classic experiment, half the participants were given a mug: estimated selling price, $7.12. Yet the other half (those without a mug) were willing to pay $3.12 for it on average. The mug was identical. Ownership had changed the perception of value.
Spotify, Netflix and virtually every subscription service are built on the endowment effect. The free month is a transfer of psychological ownership. After thirty days, the playlist is yours, the series you have saved are yours, the preferences you have built up are yours. Cancelling the subscription therefore also, and above all, means losing what you have built.
Governing cognitive biases
All these mechanisms work. Many of them have been used by brands the public respects and loves. Using them to steer a choice the consumer would have made anyway is essential in today’s saturated market.
It is one thing to use biases like a trading app, making it harder to exit losing positions; it is quite another to use scarcity like Booking.com to create urgency around a trip you wanted to take anyway, or to use the endowment effect like Spotify on a service that is worth its monthly subscription.
Sound brand governance includes deciding which psychological mechanisms one is prepared to use, and to what extent. A brand that builds its relationship with the public by exploiting the brain’s biases without creating real value achieves short-term growth and long-term erosion of trust. A brand that uses the same mechanisms to amplify the value it genuinely offers builds something more solid.
The difference lies in the direction, not the tool.
New Connections (FAQ)
How can you tell whether a brand is using biases fairly or manipulatively?
There is one question to ask: is the psychological pressure helping me reach a decision I would have judged favourably anyway with more time, or is it pushing me towards a decision I would not make with more time? The urgency created by “last room available” on Booking can help you book a hotel you were already considering, or it can push you into hastily booking something that deserved more careful research. The same mechanism produces different effects depending on how well the underlying product stands on its own.
Do biases still work when you know about them?
Largely yes, and it is one of the most uncomfortable findings in cognitive science. Kahneman documented that biases operate at the level of System 1, fast and automatic thinking, and that intellectual knowledge of the mechanism does not switch off the emotional response it produces. Knowing that ‘only 2 left in stock’ is a scarcity technique does not eliminate the slight sense of urgency the phrase creates. It reduces the likelihood of acting on that impulse without thinking, but it does not cancel the signal.
How can cognitive biases be used in marketing without manipulating customers?
Cognitive biases can be used to make a choice clearer, reduce uncertainty and highlight real differences between products or services. They become manipulative when they conceal information, simulate non-existent scarcity, hinder comparison or push the public towards decisions that run against its interests.
Bliss analyses customer journeys, pricing, promotions, interfaces and messaging to identify the psychological mechanisms already in play and define the limits and conditions for their use. These criteria can be built into brand governance, so that techniques such as anchoring, scarcity, social proof and the decoy effect remain consistent with the positioning and with the trust the brand intends to build over time.
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