Humans Are Creatures Of Habit
We might cling to the idea that variety is the spice of life, but in all honesty, we are creature of habit. I know I am. I have literally hundreds of DVD and Blu-ray options available in my collection, some that I’ve never even seen. And when I do feel like watching a movie, I am much more apt to watch a tried and true favorite than a title I’ve never seen, simply because it’s comfortable.
Professor Daniel Read of the UK’s Warwick Business School discussed the topic on the BBC Radio Four’s “The Human Zoo” recently.
“People tend to choose more variety than they actually want to consume,” said Read, a professor of behavioral science. “We believe that variety is a pretty good thing. But the reality is that when we are actually consuming things we tend to like less variety than we think or imagine that we will like.”
In his discussion, Read offered the supermarket as a perfect example of how people think they want variety, but end up sticking to what they know best when it’s all said and done. While he spoke in terms of cheeses, let’s use a more American example…
Say you go to the store and buy bologna, salami and hot dogs. You eat the hot dogs for lunch every day for the next week—since they’re you’re favorite. When the pack is gone, you’re more likely to go buy another pack of hot dogs than to switch over to eating the salami and bologna. And while you’re there, you may even pick up a pack of ham, too, even though you still have two other types of lunch meat in the fridge at home.
“We have an image of ourselves which is different from the reality we are consuming, for all types of things,” Read said. “It is the same with books. We may think we are somebody who likes reading mystery novels, but also the occasional highbrow literary novel. In a two for three offer we buy two mysteries and one literary novel, read the mysteries and the literary novel sits on the shelf.”
Read says research shows the same type of diversification bias exists in business.
“Surprisingly this happens in investments,” said Read, who has consulted for the UK government and the financial services authority on many aspects of behavioral economics. “If private investors have a number of investment possibilities they tend to spread their investments but not in the way a finance professor would say you should do, quite often it is simply that they want to have a different number of things in their portfolio. It is once again the diversification bias.”