The transcript from this week’s, MiB: Robert Cialdini on Persuasion, is below.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
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VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: This week on the podcast, I know I say this all the time I have an extra special guest but man, I have an extra special guest. Professor Robert Cialdini, author of “Influence, The Psychology of Persuasion” is back. Professor Cialdini’s books have sold more than 7 million copies. “Influence” is on a ton of people’s top book list including none other than Charlie Munger of Berkshire Hathaway. I wish we had another three hours. I had so many questions I was taking notes furiously you can hear me writing and typing in the background.
We — I’d want to circle back to so many things he brought up, there’s so much to talk about, really it needs about eight hours. We were lucky we had him for well over an hour talking about you know, most people when they expand the successful book, they’d do a light touch up. This new book, it’s double the size of the original, it absolutely is practically a brand-new book, look for the blue and gold cover if you want to make sure you’re getting the 2021 edition. I found the conversation to be nothing short of fascinating and spectacular.
And I think you will also — you’ll hear my thought process of do I just stay with this topic? Do I get to the next question? Let me circle back. And of course, you run out of time, there’s this, I literally had 40 more questions to ask him plus all of my notes and unfortunately you know these podcasts aren’t nine hours long.
But you will find this to be absolutely fascinating. He is an intriguing person and just so knowledgeable about why people do what they do and how we influence each other including some of the ethical considerations of that.
Let me stop babbling. With no further ado, my conversation with Professor Robert Cialdini, author of “Influence, The Psychology of Persuasion.”
VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My extra special guest today is Dr. Robert Cialdini, he is the Regents Professor Emeritus of Psychology and Marketing at Arizona State University, he is the author of books that have sold more than 7 million copies including “Influence, The Psychology of Persuasion” and “Presuation, A Revolutionary Way to Influence and Persuade”, his new and expanded version of “Influence” is just out.
Robert Cialdini ,welcome back to Masters in Business.
ROBERT CIALDINI, REGENTS PROFESSOR EMERITUS OF PSYCHOLOGY AND MARKETING, ARIZONA STATE UNIVERSITY: Thank you, Barry. Good to be with you again.
RITHOLTZ: Same, I’ve been looking forward to this for a while and I have to start with you know, my 1980 something version of “Influence” is this skinny little dogeared paperback. The new book is I don’t know, it’s probably double in size, it’s bigger, it’s expanded, it’s more in depth, how much of this book is is new and different compared to original or any of the prior revisions?
CIALDINI: We added 220 new pages.
RITHOLTZ: Wow, that’s a lot.
CIALDINI: So it’s almost like a new book, we didn’t just append 220 pages, we integrated the new material into the existing material because the existing material still fortunately stands and we wanted to emphasize new directions, new information, new examples and specifically new ways to harness those principles.
One of the things we got as feedback on previous editions is “You know, Professor Cialdini, we understand those principles of Influence, we see their utility in business but can you give us the exact words that we can use to ignite them, to activate them in a particular situation?”
So there’s a lot more of specific things to say, specific scripts to use, specific sequences of information to provide that allow you to be the benefit of those powerful sources of change.
RITHOLTZ: Quite interesting. I have to go back to the original book and ask you a question that you know just grabbed me when I first read this. And in the beginning of your research for influence which really dates back to you as a grad student, you spent a few years working undercover at places like used car dealerships or telemarketing firms. Tell us a little bit about the genesis of influence.
CIALDINI: You know, I started working as an academic research psychologist, social psychologist, studying my passion which is persuasion and social influence in a laboratory using college students as my subjects for the most part. And learning some important things, I think, by being able to structure an environment in which we were able to test exactly the question that we were interested in in a rigorous way. But I quickly began to see that I was limiting myself and recognizing how we could generalize the results that we got from college students in a laboratory to influence words that are being taught all around us every day in which people are trying to move us in a particular direction and we’re trying to move others in a particular direction.
What’s the evidence of what works in naturally occurring interactions between people that cause one person to say yes to another, and it seemed to me that there were professions whose business it is to get others to say yes to them.
They must know what works otherwise they would go out of business.
So I began to take training undercover in as many of the influence professions as I could get access to by signing up to be a trainee. So I would learn what they had learned that got people to say yes in a variety of these professions. So I learned how to sell automobiles from a lot, I learned how to sell insurance from a desk, I learned how to sell portrait photography over the phone but I didn’t stop with sales. I learned how advertisers and copywriters get people to say yes from an ad they write, how charity solicitors get people to give funds and donations to particular causes, how recruiters get people not just service recruiters or business know corporate recruiters get people to move in their direction, what do coach recruiters do?
And down the line I look for what were the commonalities that worked in each of these various professions that everybody said do this, do this thing because it enriches us if you do so.
RITHOLTZ: So tell us some of the commonalities what phrases and thoughts and influence programs for lack of a better word because I think sales training is the wrong description, what was the common thread in all of these different entities?
CIALDINI: I was shocked at how small the footprint was.
I only counted six universal principles of influence that were recommended in each of these influence professions. The first is reciprocity. People say yes to those they owe. So one thing you can do is give first, give something of value to people and they will stand ready to get back to you when you ask for something, not necessarily directly in return but down the road if you give them information that is a value for them, you give them something a favor or service for free, and then they — it’s their turn they’re much more likely to say yes to you in return.
Here is a lovely little study done in a candy shop. If the manager gives a little piece of chocolate to people as they come in, as a sample they are 42 percent more likely to buy candy.
RITHOLTZ: Wow.
CIALDINI: Now, the key is you might say just like the chocolates, so they bought some more, if you look into the data, the great majority didn’t buy any more chocolate, they bought something else because it wasn’t what they had received, it was that they had received. So I always advise if you go into a situation where you want to be more influential, let’s say you’re in the new situation maybe a new organization or a setting and there’s a group of people you want to be influential there, the first question to ask is not to look around the room and say who can most help me here, the first question is can I most help here.
RITHOLTZ: So show up with some coffee the first day and it will pay dividends.
CIALDINI: Those people will stand on the balls of their feet ready to give back to you.
RITHOLTZ: I remember a couple years ago we started getting solicitations through the mail for some charity where they included a dollar bill in the mailer and you say what that looks so expensive and I remember they used to do it my been the Heart Association used to send return receipt stickers for you to put on a piece of mail you are sending out so you have your name and address but this was the next level.
And then you stop and think about it well between the stamp in the envelope in the printing and putting it together, the dollar may be the cheapest part of it, but still has to have an impact on people who open up an unsolicited letter and there’s a dollar in it.
CIALDINI: Right, here is the thing, you can’t send the dollar back, right?
RITHOLTZ: Right.
CIALDINI: So you keep. And as soon as you’ve kept it, the rule of reciprocity, that’s been installed in you from childhood that says you must not take without giving return kicks in.
And the American Veterans Association give that little pack of gummed address labels…
RITHOLTZ: Right.
CIALDINI: In there — it increases donations by 50 percent.
RITHOLTZ: That doesn’t surprise me at all because not only does my wife use them but I imagine every time she pulls out that role of shiny gold return addresses and pulls it off she remembers, oh, this came to me from this group and it has to be a nagging motivation that I should really reciprocate their generosity.
CIALDINI: You know, I get these pens at various conferences and so on that have some of sponsor’s name on them and so on and you know they are so trivial, I hardly pay attention to them and they usually go in a drawer with 50 other pens, right but I went to one conference, I was a speaker so they knew who I was, and they put my name on the pen, Barry.
RITHOLTZ: What was the impact of that on you.
CIALDINI: So that’s one of the accelerators of the proof not only should you give first which is kind of different from the new usual business exchange where we say to people, you buy our product, you sign our contract and we will get back to you exactly what you hope for, that means they have to go first.
RITHOLTZ: Right.
CIALDINI: The rule for reciprocity says you go first. Anyway, and if you give something personalized to the individual, the rule for reciprocity immediately becomes more muscular. That pen, I carry it around with me.
RITHOLTZ: Wow.
CIALDINI: Because it’s got my name on it and every time I look at it I see my name on one side of the pan and the sponsor’s name on the other side of the pen, just like your wife remembers, I remember that they gave me this pen, a personal gift not just the universal gift they give to everybody, it’s one of the accelerating the powers…
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You know, after our first conversation, I think that was two years ago I got a lot of email from different people but the one that really stood out to me was from a fan of yours, Bob, and he said you were burying the lead in your insight about reciprocity and he believes that reciprocity is even more powerful than you suggest.
So I have to ask you two questions about this. First, have you ever heard this concept has anyone ever told you hey you’re not emphasizing reciprocity enough and what are your thoughts on this idea of his?
CIALDINI: Yes, I think he’s right it is so fundamental that it appears in every human culture, there’s not a single human society on earth that fails to train its members in reciprocity from childhood, you must not take without giving in return, you must not take without giving in return, in every language we have very nasty names for people who don’t abide by that rule, we call moochers, who take without giving in return, or we can call them various things like spongers, or takers, or ingrates, or teenagers, to be honest. Nobody wants to be labeled like that so people always give back to us.
And in keeping with what your listener said, I have in the new book got language to help us employ the situation in places where we used to drop the ball.
How many times have you heard somebody say, “Barry, thank you so much for this. That was really great. You really helped me out.” And what you put in the moment after genuine thank you, right? Where the rule for reciprocity dominates that situation. I will tell you what I used to say, don’t worry about it.
RITHOLTZ: It was nothing.
CIALDINI: No big deal, I would have done it for anybody.
RITHOLTZ: My pleasure, right.
CIALDINI: My pleasure. It is not your pleasure, you went beyond — I know that I went above and beyond what I went to some effort to do it and then I just slapped it out the window with the back of my hand. So here’s what I say now. One of two things. If that individual is somebody who I have a long-term relationship with I say “Of course, I was glad to do it. It’s what long-term partners do for one another” I put it on the map. I don’t deny it, I don’t dismiss it, I don’t diminish it, I say “It’s what long-term partners do for one another” and now when I need something from that individual to turn something around more quickly is like it whatever the issue is …
RITHOLTZ: They will move heaven and earth for you.
CIALDINI: Yes, now, let’s say you don’t know that person, it’s the first time and you’ve done something above and beyond the call for this person, they say thank you, that was great, Barry, here’s what I think I would say in that moment. “Look, I was glad to do it, I know that if the situation had ever been — if the situation were ever reversed, you would do the same for me.”
Once again, we don’t diminish it, we just say you play by the rules, I know you play by the rules and let’s be careful not to say if the situation had been reversed you would’ve done the same for me, that is in the past, it ever happened in the past — in the past, what you — what I say now is if the situation were to be reversed, I know you would do the same for me.
So you’re planting the seed prospectively as opposed to referencing what already took place in the past. I’m planting the seed and I’ve cultivated the earth before I planted.
RITHOLTZ: It’s almost like it’s presuasion.
CIALDINI: Exactly, right. So we’re talking about reciprocity on the micro level and some of the examples that you reference in the book, social etiquette, gift giving, handshakes, the golden rule things like collaboration or even collusion but what about reciprocity on a macro level and some examples include the Marshall plan or open immigration policies, how does macro reciprocity work?
CIALDINI: It works, remarkably, it goes back to the Magna Carta in fact where you know the British statement of how we govern now, one of the features of it from I think the 12th century, said if we are in a war with another country, if our people are representatives who are selling our commercial representatives are people who were selling in their country, if they are protected, then we have to protect their foreign citizens who are in our country.
It explains something that I’m old enough to remember the Cuban missile crisis back in the early 60s when the world was on pins and needles because the US had found that Russia, no Soviet Union at that time had sent guided missiles and put them in Cuba and pointed them to the United States, nuclear missiles, well John F. Kennedy was president at the time confronted Khrushchev, head of the Soviet Union at the time and demanded that they be removed otherwise there would be war. And said we set up a blockade so any Soviet ships that are currently coursing to Cuba to continue to add to the nuclear stockpile there, they would be stopped, and Khrushchev said if you do that that’s an act of war, it’s not any war, it was a nuclear war that was estimated to eliminate one third of the population on Earth? How did they get out of it?
Well but the story was that Kennedy was so steadfast, so steely eyed, so resolute that he refused to back down and eventually Khrushchev blinked and removed his missiles from Cuba and the US won and Kennedy built his reputation as an anti-Soviet leader that increased his popularity. Well, there had been some new documents released recently from the Kennedy library that showed that it was not bad at all, it was reciprocation.
RITHOLTZ: Oh really?
CIALDINI: Kennedy promised to remove missiles from Turkey that were pointed to the Soviet Union if Khrushchev would remove missiles from Cuba and required that Khrushchev not tell anyone about the reciprocal exchange because that would weaken his political Kennedy’s political position at home as somebody who compromised with the Soviets.
And so what happened was the rule for reciprocity was suppressed as the true reason instead stubbornness was elevated, the things that actually would have created a war was elevated to prominence as the reason we got out of, it was the opposite, it was reciprocity that exists in all human cultures, that’s what got us out of the Cuban missile crisis.
RITHOLTZ: So there’s a whole other conversation to be had about why politicians have to hide what really happened and present such a strong face. I’ll hold off on that but I have to ask you a question about evolutionary biology because you said reciprocity and a lot of the rules of influence show up in every single culture on earth.
So is this a learned behavior or is this really written in our genetics as social primates?
CIALDINI: This is something that only humans have in terms of future reciprocity, there will be some exchanges cooperative interactions between infrahumans and within their species, right, so they can cooperate, but the idea of dreading something and having an obligation to give into the future, only we have that and it’s mostly in my view socialized into us rather than evolved into us.
Now I’m not going to take a clear stand on that but for the most part in my view the reason it exists and we have those nasty names in every human culture for people who violate the rule is that if we have a society where people give and take and cooperate in exchange, the society thrives, it flourishes, so that’s why it’s socialized into us I think primarily.
RITHOLTZ: Quite fascinating I have to start with a quote from the new version of the book that I found quite fascinating, quote “Essential assertion of this book is that our choice of what to say or do immediately before making an appeal significantly affects its persuasive success but there’s a related choice that occurs even before that one, it’s whether on ethical grounds to try to attain success in such a way” that’s the beginning of chapter 13, discuss why you thought it was important to dedicate a big chunk of the book to this.
CIALDINI: Because of the principles we talk about in the book are dynamite and we got possession of dynamite so we have to use it ethically. We can use these principles for ill or we can use it for them for good. And the clear recommendation is if we use them in an ethical, responsible way, we build relationships, we build long-term sustainable exchange histories with people, and that continues into the future.
If we use it to exploit or deceive or coerce people into change, we may get that change in the immediate situation but we’ve essentially created an adversary, somebody who resents being pushed or tricked into ascent.
And so and in fact Richard Thaler, Nobel laureate, in one of the endorsements for the book, here is what he says about the book, “There’s dynamite here, please, use what you learn with care” and now that is a very wise thing for him to say, not surprisingly, Nobel prize-winner, it’s the ethics of the process that are so important to producing long-term relationships that continue to pay off for us.
RITHOLTZ: You know I mentioned earlier that you had gone undercover at car dealerships and charities and insurance sales place, there’s a line that has always stayed with me from the book which is quote “The number one rule for salespeople is to show customers you genuinely like them” why is this so important for a salesperson to demonstrate affection to a customer or client?
CIALDINI: Because people like those who like them. And now, we are into the second principle of influence, liking, that allows us to be more influential. If we can arrange for people to feel a sense of rapport, a sense of liking for us before we begin the process, we’re halfway there already to ascend before we even deliver the request or the recommendation or the proposal.
And so one way to do that is to turn the rule that I always heard in every one of these training programs on it the ear they we were always told if you want to get somebody to say yes to you for your request or proposal, get them to like you, right? And then there are various ways to get them to like it but one thing I recognized is that the way you — the best way to do it is to come to like them and show them that you like them and down come the barriers to change because they know that if you like them, you are going to steer them correctly that’s what we do with the people we like, that’s what we do with our friends, and the fact is they will be right.
If you truly come to like somebody, you will try to give that person the best possible arrangement because of that sense of rapport and affection you have for that person. So that’s what we can do because we can’t control how much we like other people more than we can control whether they like us or how much they like us.
So let’s work on ourselves, find things that are genuinely praiseworthy about that person right? It may take a little longer for certain people and other people but you can do it focus on that and let that person know, give them a complement, a genuine compliment, or find things that are genuinely similar between you and that person. Not only do we like people who like us, we like people who are like us.
RITHOLTZ: Members of the same tribe.
CIALDINI: That’s right.
RITHOLTZ: You referred recently to – I forgot who you were talking about but they were a fan of the same team that you’re a fan of and suddenly everything about that person is hey they were smarter, their books were about — everything about them took a step up and that’s just because their members of the same you know they like the same things and members of the same tribe they have similar affiliations, it’s that powerful social proof.
CIALDINI: It’s that powerful, it is that powerful and any and all of give you the exact situation, I grew up in Wisconsin the NFL team that’s the home team and Wisconsin has always been the Green Bay Packers, I read an article a few months ago that said that Justin Timberlake and Little Wayne, these two musical celebrities right they are both avid Packer fans. Barry, I immediately thought better of their music and I wanted them to succeed into the future because we are members of the same tribe.
RITHOLTZ: And you are not what I think of as a Little Wayne fan.
CIALDINI: Not from the outset, but man, now.
RITHOLTZ: So since we’re talking about ethical considerations and questions, it raises a really important issue how do we protect ourselves from people who may not have your level or Dick Thaler’s level of ethical recognition and how we protect ourselves from unscrupulous users of these psychological techniques?
CIALDINI: Right, so at the end of every chapter in the book, I have a section called, “Defense, how to say no to somebody who’s used these principles” right? So let’s take the liking principal for example and let’s say you’re shopping for a car or you’ve got somebody wants to partner with you on some business deal and if you find yourself liking that person Morrison you would’ve expected for the amount of time that you spent together, let’s go to the cars sales from an and if you recognize that liking is there in the situation added to an extent that’s inordinate, more than you would expect, step back from the situation and recognize what it — why am I liking this salesperson oh yeah he gave me donuts and coffee, oh yeah he says that his wife grew up in the same place that I grew up, oh yeah he complimented me on my interior choices for the car and then and then separate that salesperson from the car because you will be driving the car off the lot, not him.
RITHOLTZ: Quite interesting.
You know before we get into some specifics, my favorite story in the original book is how you met Charlie Munger. Tell us about how your relationship with Charlie Munger came about.
CIALDINI: One day I went to my mailbox to find an envelope, a big envelope and I opened it to find a note from Charlie Munger appended to a single share of Berkshire Hathaway stock. The note said you don’t know me but we have used the material in your book “Influence” to make us so much money here at Berkshire Hathaway I’m sending you a share of a stock out of reciprocation, your first principle, you deserve something in return. At the time that share was worth $75,000.
RITHOLTZ: This was like the early 90s, is that what we’re talking about?
CIALDINI: Yes.
RITHOLTZ: And today that’s worth about $430,000.
CIALDINI: Exactly and let me tell you, the reason I held onto that share all these years with great benefit was because of what Warren Buffett and Charlie Munger do in their and in Warren’s letter to his shareholders every year for Berkshire Hathaway, where Warren establishes his credibility on the front page on the first or second page of text of every of those of those letters, he does something to give me a sense of his credibility, his knowledge and trustworthiness, he mentioned something that went wrong that year something that didn’t go as expected, and then he says of course we learned from that, we will never do that again, and then he moves on to of the strengths of the year all the things that went right, Barry, every year, I would say to myself, wow I’m dealing with a straight shooter here. Not only is this guy knowledgeable he knows what’s up what went right and what went wrong, he is not trying to fool himself with this – he is trustworthy, he’s willing to tell what went wrong before he tells us what went right.
He establishes his truthfulness which makes me believe in what went right to truly process it deeply and believe it fully because he first was willing to tell me what went wrong. I now believe the next thing he said.
RITHOLTZ: I recall reading something about that in “Influence” someone who is honest and humble.
CIALDINI: Exactly, so I have never thought about selling that unit of a share of stock because every year I see how honest and knowledgeable the man is on the front page of the text that he sent. There was a couple of years ago Berkshire did so well that year, there wasn’t anything they did wrong so you know what Warren did, he told us about a mistake he made in 1993 with Dexter Shoes, he told us about an error just so he’s making clear to us look not trying to claim that I know everything, look I make mistakes and once again I’m astounded by the honest — the transparency of the guy and am willing to follow him from there on.
So it’s a brilliant is a brilliant tactic that it’s not a tactic in the sense that he’s doing something phony, he is an honest guy, he showing us his honesty by doing something I recommend to I would recommend all your listeners. If you got a case to make and all cases of course have strengths and weaknesses, mention a weakness relatively early in your case because that establishes your credibility for what you say next. And that’s the moment for your strongest argument, immediately after you’ve mentioned the weakness of your saying you II think we ought to move in this direction for your investments let’s say you’re an advisor but there let’s talk about the tax consequences of this and this may take a little bit longer, but I think it will be well worth it for these reasons.
People will now listen to those reasons differently in the moment after you’ve mentioned a weakness and you will allow those strengths to just wipe out the weakness.
RITHOLTZ: Quite interesting. The other story in the book that really cracked me up I guess we should’ve talked about it when we were discussing the ethical considerations is the story of the two tailors, Sid and Harry where one of them pretends to be hard of hearing, tell us a little bit about that story because it’s just unbelievable that these guys figured this out and used it so effectively.
CIALDINI: The Drubeck brothers.
RITHOLTZ: Yes, yes.
CIALDINI: It’s the story of who ran a men’s clothing shop back in the 1930s in the depression and when a person would come in the man would come in to buy a suit he would be in front of that three paned mirror, you know, you stand and be getting the trying on a suit and one of the brothers would call to across the room to the taylor, his other brother, Harry how much for this beautiful all wool suit and Harry would call back $39 and the other brother would say he would cup his ear to hear and then he say, he says $29 as if he didn’t hear it correctly and the guy would jump at it.
RITHOLTZ: Right, thinking he is getting a bargain.
CIALDINI: And hustle out of the store thinking he had pulled something over on the Drubeck Brothers, in fact, the Drubeck brothers had pulled something over on him which was the say you’re getting this deal they’re getting this at a big discount, in fact $29 was the true price of the suit.
RITHOLTZ: So here’s the question that story raises and I’m fascinated by it. So in the traditional world of behavioral finance folks like Thaler or Kahneman would say the buyer there the suit buyer was anchored on $39 and suddenly $29 looks relatively inexpensive so it kind of raises a couple questions, is this just anchoring, is this is there some social authority about oh I’m getting a 39 – a more valuable suit, what’s going on with this and then I want to ask you some questions about behavioral economics, why does the buyer think they’re getting a bargain and buy the suit and run out?
CIALDINI: Right. You’re correct about the anchoring process. If I give you a high number initially if I ask you the distance to the sun, Barry, and then I want to sell you a bottle of mineral water, the price of that bottle of water seems smaller to you by the process of anchoring, and so you’re more likely to buy it, it’s crazy but that’s the truth that’s the way we work it has to do with something called perceptual contrast.
Anyway right in that contrast, the $29 suit now seemed less expensive than it would have if he hadn’t heard $39 first, so that is one component. The other is he is thinking a getting a great deal on this besides the fact that it seems less expensive, it seems like it’s a $39 suit that he’s getting for $29. So both of those things are working.
RITHOLTZ: So let’s talk about behavioral finance and throughout the book you know, I kept having the back of my head parallels to behavioral economics, your first version of this was 1984 did you have any idea that you are operating in parallel with people like Kahneman and Tversky or Richard Thaler or Robert Shiller or Thomas Gilovich, how aware were you of that field which really wasn’t recognized for at least a decade or two later.
CIALDINI: Right, I had no idea but I think I understand why it turned out that way so for example “Influence” the book has been called the Bible of e-commerce of digital marketing, well when it was written there was no e-commerce, there was no digital market there was no Internet and people have said, how could you see ahead so far in the same way that you would say how could you see so far ahead into behavioral finance or behavioral economics?
It was not by looking forward as some sort of oracle, it was by looking inward what are the things that have always moved us as a species toward change what are the things that have always counseled us correctly as to it’s time to act in this way versus some other way.
It was the six universal principles of influence that had always driven us into change and so that’s what I did, I didn’t look forward 30 years, I looked inward to the factors that have always moved us as a species.
RITHOLTZ: So let’s talk about some of those six, we talked about reciprocity, we talked about social proof, what other drivers do you think are worth mentioning.
CIALDINI: We’ve also talked about authority.
RITHOLTZ: Authority, right.
CIALDINI: The degree — the extent to which you want to say yes to those individuals who have showed you that they are credible sources of information, they are both knowledgeable and trustworthy, we talked about that. Another is, of course, scarcity, the idea that…
RITHOLTZ: Let’s talk about that because that is such a key issue in economics, in finance, in psychology, why is scarcity such a giant driver?
CIALDINI: It turns out that is scarcity that is the idea that people want more of those things they can have less of is that they are afraid of losing, they are afraid of losing that desirable opportunity, they’re afraid of missing out on this chance to move in a productive direction and so on.
And as Daniel Kahneman has shown us, loss aversion, the idea of losing something is more powerful more motivating than the idea of gaining that very same thing. And scarcity, so loss is the ultimate form of scarcity, it means you can’t get it any more.
So the thing that makes scarcity so powerful across the widest range of situations is the idea that we will lose something and that loss drives us crazy to an extent that dream doesn’t benefit that doesn’t make us as and as satisfied as a loss makes us dissatisfied with the very same thing.
RITHOLTZ: Right, it’s almost a two to one ratio, we feel loss is twice as intensely as we feel the pleasure of gains, and my pet theory on that I wanted want to ask you about it feels that gains are temporary, you get a windfall, you go out and you know spend it freely and it’s gone, but losses feel like their permanent and never to be recaptured again, why do you think the loss factor the scarcity factor is so much more intense.
CIALDINI: Well, I have my own opinion but II really like yours as well. So my guess is that if you ever see something with a big effect, it’s never caused by one thing.
RITHOLTZ: Right, it’s complex.
CIALDINI: It is always multiply caused, so here’s what I have thought and it’s an evolutionary explanation, if you are — if you are operating at a level of survival and you have a chance to gain something, okay you get an increment upward, if you get an increment downward, you may be gone.
RITHOLTZ: Game over, right.
CIALDINI: You’re gone.
So you have to pay much more attention to the idea of losing something because you — it may eliminate you.
RITHOLTZ: Right existential threats are more significant than you know a few, I always think about this question in terms of Las Vegas not that I’ve been to Vegas and it seems like years but right outside of casinos is very often jewelry shops and you watch people come out with winnings and buy you know crazy expensive jewelry and stupid expensive watches, but the people who lose the rent money they’re really in dire straits and that’s not for people on the edge of survival. If you’re — if you’re just above that subsistence level, man it’s an existential threat to suffer a loss.
CIALDINI: Existential is precisely right. You’re gone.
So you have to be alert to it, you have to be suspicious about any situation, you have to be willing to move against and counter the possibility of loss to a much greater extent than the probability of gain.
RITHOLTZ: Makes a lot of sense. Any other of the main principles that we didn’t get to that you think is worth mentioning before I have a one more question I have to ask you but I want to stay with the principles.
CIALDINI: Yes, and there’s the new one, the one that I call unity, I’ve actually added the seventh for this edition, and we kind of talked about it already is that the willingness of people is the communicator you can arrange for people to see you as one of them as of them, not just like them in tastes or preferences or styles of sort, that’s what — that increases liking, but if you can get them to see you as one of the category of individuals that you consider a we group an us group, everything inside that category becomes easier to influence, you’re more cooperative, you believe those people more, you trust those people more you say yes to those people more.
RITHOLTZ: Really interesting.
CIALDINI: And what is key is you have to bring to consciousness that unity that exists and I’ll give you a short example of something that works for me, a while ago I was writing a report was due the next day and as I was skimming it before putting it in an envelope and sending it off, I saw that there was a section of it that was not really compelling, I didn’t really have the evidence to make that case in that one section that I wanted to be persuasive about.
But I knew that a colleague of mine let’s call him Kim, did some research the previous year and he had the data that I needed but I didn’t have them, he had the data so I sent them an email I said to Kim, I explained, you know I have this thing it has to go in the mail tomorrow to this granting agency and I don’t have the data, could you go into your archives, get that data out for me and send it over to me so I could get it into my report and get it off by the end of the day. I said I’m going to call you to tell you about the specifics of what I need.
Well, I called him and Kim was known to be an irascible kind of sour guy, he just was a negative guy, so he picked up the phone, he said “Bob I know what you’re calling and the answer is no. I can’t be responsible for your poor time management skills. I’m busy too”
Barry, before I knew the research about unity and being raising to consciousness the category similarity between people that defines them, I would’ve said come on, Kim, I need this, this thing is due tomorrow he already said no to that. Here is what I said instead, Kim, we’ve been members of the same psychology department now for 12 years I really need this. I had the data that afternoon.
RITHOLTZ: I imagine not a lot of people say no to you and get away with it.
CIALDINI: Well, my kids.
RITHOLTZ: Well, reciprocity doesn’t always work with kids for obvious reasons, they expect it.
CIALDINI: Teenagers.
RITHOLTZ: So let me ask you this question the last time we had you on the show, I asked you a question what made Donald Trump such an effective communicator given the fact that we now have a new president and there’s all sorts of things going on around that, I want to ask you this question about President Biden.
A large percentage of Republicans don’t believe he was legitimately elected, they believe President Trump that the election was stolen, given everything you know about tribes and influence, what do you think President Biden can do to influence this group of Republicans that he was legitimately elected.
CIALDINI: I’m going to suggest something that is a little used, very underused strategy from persuasion science, the convert communicator, this is somebody who used to believe what you believed what you currently believe, he’s one of you or she’s of you and then has a new piece of information that you don’t have that changed his or her mind, and tells you why.
You can’t dismiss that person, this is of your tribe, this is of you, this is one of you now you’ve got a communicator not speaking from outside of your we group but speaking to you from inside of your we group and providing a piece of information you don’t have.
So let’s say it’s about getting vaccinated, and you’re just not convinced that you should and that it is not necessary and then you have somebody who says I used to believe that and my mother got, she wouldn’t wear a mask, she wouldn’t socially distant she wouldn’t get vaccinated just like me and we buried her last week or if it was it’s about measles vaccinations and you say and then my daughter got measles and she’s death, right, now that’s a piece of information you don’t have but it’s coming from one of you, that’s what I would recommend.
RITHOLTZ: So I know I only have you for a limited amount of time, let’s just — this has really been absolutely intriguing but let’s jump to our favorite questions that we ask all of our guests starting with tell us what you’ve been streaming this past year under lockdown, what are your favorite Netflix or Amazon prime shows or what podcasts are keeping you entertained.
CIALDINI: I’ve been re-streaming “Breaking Bad”. I love that show, and these days “The Crown” I’ve been — I’m still in the middle of “The Crown” right so those are the two I’ve been entertaining myself with when I haven’t been writing this expansion to the book.
RITHOLTZ: Quite interesting. Tell us about your mentors. Who helped influence your career either as a professor or an author?
CIALDINI: Yes, so there are three individuals in graduate school and in my postdoctoral fellowship. One was my major advisor Chad Inspo (ph) another famous psychologist at my graduate institution UNC at Chapel Hill, John Pebo (ph) and then my postdoctoral fellow advisor, Stanley Schachter at Columbia University.
But I’ll give you a mentor who taught me something that I think saved my career. Before I went into the college I was a very good high school baseball player and I had an offer to play minor league baseball from a scout from the White Sox and I was going to be in for I don’t know the level B baseball, way down below at the start and he came to my last game and he had a contract and he had a he wanted me to sign and I was a centerfielder, I wanted be Mickey Mantle or Willie Mays you know and his pen wouldn’t work, and on the way to the car to get his other pen, we walked he asked me, “Kid, are you any good at school?” I said yes.
He said “Good enough to get into college?” “Yeah” “Good enough to finish college?” “Yeah” “Do you like school?” “Yeah” he said, “Go to school, kid. You’re not good enough to make the majors” And he was right, I couldn’t hit a slider, I couldn’t hit a good slider, and I was going to see a lot more good sliders as I went up the ranks.
RITHOLTZ: Sure.
CIALDINI: And I went to school instead that man I mean if I had wound up in you know class a ball, I moved up to your middle or maybe class AA baseball and then just couldn’t get any further after four years let’s say trying, by four years maybe I’m married maybe I have a child I don’t get to go to college now, you know what I get to do? I get to be the assistant manager of the Pizza Hut in the last city I wound up in and Barry we’re not having this conversation.
RITHOLTZ: Probably not. That is amazing. Did you ever get a hold of who that guy was, do you know who he is?
CIALDINI: He passed away, his name was Bunny Brief (ph). I remember him.
RITHOLTZ: Did you have an opportunity to thank him?
CIALDINI: He played for Detroit back in the 40s and 30s but he was a scout in Milwaukee where I grew up in. Yes.
RITHOLTZ: Did you have an opportunity to thank him for his gracious…
CIALDINI: I never did, he passed away before I had the chance to recognize how important it was for him to tell me, look don’t just follow your passion which everybody else says, right?
RITHOLTZ: Right.
CIALDINI: Follow your passion that you’re good at.
RITHOLTZ: That you are great at, not even good at. Right, right. That’s an unbelievable story.
So let’s go to the books, tell us some of your all-time favorite books and what are you reading right now?
RITHOLTZ: So in terms of fiction “Remains of the Day” by Ishiguro and “Underground Railroad” by Colin Whitehead, for nonfiction I’m going to go to the things that are “Influence” related “Aristotle’s Rhetoric” my god, the first time anybody tried to systematize the process of persuasion, he did it.
And then my Nobel laureate authors, you know Daniel Kahneman for “Thinking Fast and Slow”, “Nudge” for Thaler and Sunstein, goes with them and what I’m reading now is “Sapiens” by Yuval Noah Harari. Brilliant, brilliant book.
RITHOLTZ: Really, really interesting. Let’s talk about you mentioned don’t always just follow your passion, what sort of advice would you give to a recent college graduate who is interested in a career in psychology or academia or in writing or any of combination of those three?
CIALDINI: If you’re really interested in a career in psychology there’s a little secret that you can employ, it’s called independent study credit, you get credit for working on a project with one of the professors in the psychology department or in the communications department or in the marketing department whichever one you want to go to and you get experience working as a professional on a project that they have.
That tells you whether you really want to go further in this but it also gives you somebody who can write a letter of recommendation for you to the next step, to the Masters program or MBA program or PhD program to be in a psychology related career.
RITHOLTZ: Quite interesting. And our final question what you know about the world of psychology today that you wish you knew back in 1984 when you were first writing “Influence”
CIALDINI: Here’s what I wish I knew about the influence process back then that would have made for a better environment for me going forward.
It is when you are going into a situation with people you don’t know, you don’t know much about them at all, think the best of them, think the best about them, it allows you to be generous with them.
In here, there are three downstream consequences of that generosity, first by the principle of liking, they will like you more for being a generous person. Second by the principle of reciprocation, they will give you that generosity back, third by the principle of commitment and consistency, when they recognize that they are being generous with you, they are giving you things, they are working together with you they will want to be consistent into the future with what they have already done.
And now you have a set of people you like who like you who are exchanging favors, gifts and services and information into the future.
If I had known that 30 years ago, I would’ve done it immediately it took me a long time to recognize that.
RITHOLTZ: Quite fascinating.
Bob, thank you so much for being so generous with your time. We have been speaking with Robert Cialdini, author of “Influence”.
If you enjoy this conversation, well be sure and check out any of our previous 400 such interviews. You can find those at iTunes, Spotify, wherever you feed your podcast fix. We love you comments, feedback, and suggestions write to us at mibpodcast@bloomberg.net, sign up for my Daily Reads at Ritholtz.com, check out my weekly column, it’s on Bloomberg.com/opinion, follow me on Twitter @ritholtz.
I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Maru Ful (ph) is my audio engineer, Michael Boyle is my producer ,Atika Valbrun is our project manager, Michael Batnick is my head of research.
I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.
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