We’ve Got Something For Everyone: How The Business World Can Leverage The Psychology Behind Horoscopes

Have you ever believed in a Horoscope?

Many years back, before international travel became as common as it is today and before I even had a passport, a fortune-teller prophesied that I would be traveling a lot between 2014 and 2018. He was so specific that I just could not ignore the prediction. So, I diligently stood in a long queue and went through the whole (somewhat tedious) process of getting a passport. 

To be fair to the fortune-teller, he was not entirely wrong. Come 2014, I got married and moved to a different city from where my head office was — and as a result, I ended up traveling every week to the head office for work. This was all within India. Did I use my passport? Unfortunately, not as much as I imagined I would.

The fortune-teller made a generic statement. What young, fresh graduate does not want to believe he or she will travel? It was a safe prophecy to make. Full marks to him!

What is it about predictions, fortunes, and horoscopes that make us want to believe them? As it turns out, it is less to do with astrology and more to do with psychology.

The Royal Connection to Horoscopes 

Would you believe it if I told you the modern-day horoscopes owe their existence to the feisty Princess Margaret?¹ Just like it would be today, it was a massive event for the public in 1930 when the royal family announced the birth of Princess Margaret. Everyone wanted to know more about her. Newspapers were falling over each other trying to bring in new stories and perspectives about this royal event. Amidst all this competition, John Gordon, the editor of The Sunday Express, chanced upon a brilliant idea: he decided to print a horoscope about the Princess’ life. He roped in a young astrologer, Richard Naylor, to gin up stories about the future. 

The first article published three days after her birth and titled “What the stars foretell for the new princess” was a runaway hit. But surprisingly, the readers had a peculiar question for the editor. Thousands of letters came in asking the editor if the horoscope was valid for them—if indeed they were born on the same day as the princess. This got John Gordon thinking. Until that time, horoscopes were specific to each person and their birthday. But if people wanted to know about their future, how could he leverage this opportunity? 

Naylor was given the task of coming up with a way to foretell every person’s fortune, but, of course, while restricting it to one column. After some research, he came back with the idea of dividing the predictions into 12 sun-signs or the 360° path of the sun split into 30° sectors, namely Aries, Taurus, Gemini, Cancer, Leo, Virgo, Libra, Scorpio, Sagittarius, Capricorn, Aquarius, and Pisces. And so started the weekly column, “Your Stars,” that told each person how their week would look.

And just like that, the modern-day horoscope was invented.

Naylor may not have realized it then, but he had made use of several psychological tricks in doing what he did. By naming the horoscopes after constellations, he had made them look credible. By giving people a group to belong to, he had made them feel related. By being specific-yet-broad, he made each person feel like the horoscope had been written just for them. This last effect is called the Barnum effect or the Forer effect.

The Barnum Effect

The Barnum Effect is defined as the effect “that occurs when individuals believe that personality descriptions apply specifically to them (more so than to other people), even though the description is actually filled with information that applies to everyone”.² It takes its name from The Greatest Showman himself, PT Barnum, of the Barnum and Bailey Circus. Barnum— who was a master manipulator and showman—was known for the (perhaps apocryphal) quote: “We’ve got something for everyone.” 

And indeed, horoscopes do have something for everyone. The Barnum effect was coined by psychologist Paul Meehl, who termed horoscopes and other such vague personality descriptors as Barnum statements.³ Or, in other words, statements that everyone feels are right for them. An example of such a statement would be “at times you are extroverted, affable, sociable, while at other times you are introverted, wary, reserved.”

As you know by now, horoscopes and predictions rely heavily on this type of communication. 

Jonathan Cainer is one of the most successful horoscope writers — having written for the Daily Mail, Mirror, and The Guardian⁴ — and his horoscopes are read by millions every day. What makes his horoscopes stick is his perceptive understanding of his readers’ states of mind. That is, Cainer realized that people often rely on horoscopes when they are not happy or are worried about the future. Thus, all he had to do was encourage in as generic a way as possible.⁵

The science behind the Barnum Effect

The success of general encouragement is a well-documented phenomenon. Psychologist Bertram Forer’s paper “The Fallacy of Personal Validation” is one of the earliest works on this subject.⁶ In an exciting experimental design, he administers a personality test to his students. A week later, each student is given a so-called “individualized” sketch of their personality. What the students did not know was that they all received the same sketch, consisting of many “Barnum” statements. Some of these were:

  1. You have a great need for other people to like and admire you.
  2. You tend to be critical of yourself.
  3. You have a great deal of unused capacity, which you have not turned to your advantage.
  4. While you have some personality weaknesses, you are generally able to compensate for them.
  5. Disciplined and self-controlled outside, you tend to be worrisome and insecure inside.

The students were then asked to rate how well it applied to them. The average rating received was 4.30, on a scale of 1 (not accurate) to 5 (very accurate). Forer hypothesized that crystal gazers, personality tests, and fortune-tellers all latch onto two aspects: universal validity and personal validation. The experiment was replicated in a recent paper, with similar results.⁷

Implications for the product and marketing world

What does this mean for business? The knowledge that people tend to believe generalities as irrelevant to them when delivered from an authentic source does not mean we have to deceive customers. But, it does teach us valuable lessons about how we can engage better with our stakeholders. Here are some thought starters:

Personalization: The world of Spotify and Netflix has shown us that personalization works. One of the reasons it works is because of the magical words “for you”. Having spent a lot of time running around in rabbit holes suggested by these companies, I often ask myself why I even entered these holes in the first place. You know the answer now!

Content: The Barnum Effect gives a good trick for getting the content right in product design: specific, yet generic. Not everyone needs to build a personalization algorithm; sometimes, the right content can get you there as well. Phrases such as “just for you” and flattery work well. The iconic L’Oreal tagline “Because you are worth it” shows us how the right phrase can make the right impact.

Block Personalization: Naylor’s horoscope story tells us something important. People like belonging to groups. Sometimes, personalization may not be worth the effort, but how about segmenting customers into groups and personalizing for the groups? This does two things: (a) It makes the customers feel like they belong to a group and (b) because they relate to the group, the Barnum Effect can then be used to address the group in the right way.

Performance Management: An exciting area where this effect plays out is in feedback. In most companies today, the concept of 360-degree feedback exists — that is, employees get feedback from reportees, superiors, and peers. When forced to give feedback to many people, employees tend to subconsciously resort to being generic. The person who received the feedback assumes it is meant for them. Being aware of this may change the nature of feedback.

Horoscopes have been around for at least 2,000 years⁸. And let’s face it, they will likely be around for a long time more — at least as long as people need to feel reassured and happy about themselves. The psychology behind why they work opens up a world of ideas for product design and marketing. 

Does Loss Aversion Impact How Judges Make Decisions?

Loss aversion is a widely documented psychological occurrence that is encapsulated in the expression “losses loom larger than gains.” [1] Basically, losing something feels worse than the corresponding pleasure derived from gaining that same thing. [2]

The phenomenon of loss aversion, which has been shown to have a basis in neuroscience, is visible across different demographics and even species, having been documented in professional financial traders, taxi drivers, young and old people, and even capuchin monkeys. [3]

Loss aversion is visible all around us in our daily lives as well, even if we don’t realize it. For example, professional golfers take more chances to avoid a loss than to obtain a commensurate gain, preferring to take more risky shots to avoid the loss of a bogey (taking one more shot than expected) than to achieve the gain of a birdie (taking one less shot than expected). [4] We see loss aversion in politics, too, with then-candidate Donald Trump using loss rhetoric frequently during his campaign for President. For example, Trump repeatedly asserted that Americans were “losing our jobs” to illegal immigrants and at one point said “[w]e’re losing everything.” [5]

But does loss aversion impact how judges make decisions in court?

The short answer is yes, probably.

For example, Rachlinski and Wistrich studied the effect of loss aversion on judges deciding employment discrimination cases. [6] Keep in mind that the law in this area doesn’t distinguish between discrimination in hiring (gain) or firing (loss)—it prohibits discrimination in both contexts. [7]

But, Rachlinski and Wistrich hypothesized that “even if all else is equal, applicants who are the victims of [hiring] discrimination face worse prospects for successfully pursuing discrimination claims than discharged employees.”

Rachlinski and Wistrich presented a hypothetical case to 146 trial judges and set up the case as follows: [8]

Frank Porter, a 61-year-old man, filed a complaint with the Florida Commission on Human Relations under the Florida Civil Rights Act of 1992, asserting that he was the victim of age discrimination at the hands of Gatorville College, a small private college.

Half of the judges received materials indicating that Porter “was one of five applicants for a resident director position at a dormitory and was not hired” and the other half received materials indicating that Porter “was one of five residential directors faced with a layoff due to an effort to reduce the number of staff—and he was let go.”

The failure to hire scenario presented at trial was as follows:

Porter was one of five applicants for four “Resident Director” positions at four dormitories at Gatorville College. All of the applicants held similar educational and professional credentials. The College chose not to hire Porter, contending that he did not have the interpersonal and staff management skills of the other applicants. Porter contends that the real reason he was not hired is because of his age. In support of this argument, he points out that the other four applicants, each of whom was hired, are all under 30, while he is 61. He also produced notes from the central administration supervisor with whom he met. Next to Porter’s name, the supervisor’s notes read, “Energy? Understanding of today’s college students?”

The termination scenario presented at trial was as follows:

Porter was one of five Resident Directors at Gatorville College, which sought to reduce its Resident Director staff from five to four. All of the Resident Directors held similar educational and professional credentials. The College chose to discharge Porter, contending that he did not have the interpersonal and staff management skills of the other applicants. Porter contends that the real reason he was discharged is because of his age. In support of this argument, he points out that the other four resident directors, each of whom was retained, are all under 30, while he is 61. He also produced notes from the central administration supervisor with whom he met. Next to Porter’s name, the supervisor’s notes read, “Energy? Understanding of today’s college students?”

The results were consistent with the authors’ initial hypothesis.

Although the legal standard was the same for both cases, how the law was applied varied based on the hiring discrimination versus firing discrimination frame. Specifically, 30% of judges who reviewed the firing discrimination version found in favor of Porter as opposed to only 14% of judges who received the hiring discrimination scenario [9]

Porter, in the firing version of events, was clearly viewed by the judges as more sympathetic, or as having been discriminated against to a worse extent, or some combination of the two.

And it’s not just in employment discrimination cases. Rachlinski and Wistrich found that across eight different areas of the law—including products liability and medical malpractice, among others—judges reacted differently when the legal question was framed as a loss rather than a gain.

What does this mean for how we view judges more generally?

Chief Justice John Roberts used a now-famous umpire analogy during his confirmation hearing in September 2005 to describe the role of a judge, or justice, as he saw it:

Judges are like umpires. Umpires don’t make the rules they apply them. [10]

The umpire analogy paints a picture of the judge as a neutral and impartial arbiter. It brings to mind the image of a judge who decides cases entirely rationally and consistently, based only on their objective merits.

But maybe this view of a judge is incomplete. After all, judges are human, too.


[1] Daniel Kahneman & Amos Tversky, Prospect theory: An analysis of decision under risk, 47 Econometrica 263, 279 (1979).

[2] See Why is the pain of losing is felt twice as powerfully compared to equivalent gains? The Decision Lab, https://thedecisionlab.com/biases/loss-aversion/ (last accessed Feb. 17, 2020).

[3] See generally Peter Sokol-Hessner & Robb B. Rutledge, The Psychological and Neural Basis of Loss Aversion, 28 Current Directions in Psychol. Sci. 20 (2018); see also Michael S. Haigh & John A. List, Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis, 60 J. Fin. 523 (2005) (loss aversion in financial traders); Colin Camerer, Linda Babcock, George Loewenstein, & Richard Thaler, Labor Supply of New York City Cab Drivers: One Day at a Time, 111 Q. J. Econ. 407 (1997) (loss aversion in taxi drivers); generally Robb B. Rutledge et. al., Risk Taking for Potential Reward Decreases across the Lifespan, 26 Current Biology 1634 (2016) (loss aversion in old and young); M. Keith Chen, Venkat Lakshminarayanan, & Laurie R. Santos, How Basic Are Behavioral Biases? Evidence from Capuchin Monkey Trading Behavior, 114 J. Pol. Econ. 517 (2006) (loss aversion in capuchin monkeys).

[4] Devin G. Pope & Maurice E. Schweitzer, Is Tiger Woods Loss Averse? Persistent Bias in the Face of Experience, Competition, and High Stakes, 101 Am. Econ. Rev. 129, 136 (2011) (finding loss aversion in professional golfers).

[5] James Surowiecki, Losers!, New Yorker (June 6 & 13, 2016), https:// www.newyorker.com/magazine/2016/06/06/losers-for-trump.

[6] Jeffrey J. Rachlinski & Andrew J. Wistrich, Gains, Losses, and Judges: Framing and the Judiciary, 94 Notre Dame L. Rev. 521, 573 (2018).

[7] See 42 U.S.C. § 2000e-2(a)(1) (2012) (“It shall be an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin . . . .”) (emphasis added).

[8] Rachlinski & Wistrich, Gains, Losses, and Judges, at 557.

[9] Id. at 558

[10] 9/12/05: John Roberts’ Baseball Analogy, ABC News (Sep. 12, 2005), https://abcnews.go.com/Archives/video/sept-12-2005-john-roberts-baseball-analogy-10628259.

Living a Behavioural Analysis

Phew. 

Does anyone else feel like they aged by 10 years in the past month? If the indicators are anything to go by, it seems like we are in this for the long run. A little more aging is in store for us. As a behavioral science practitioner, I am having a fascinating out-of-body experience of watching myself exhibit all the behaviors I have always talked about in my workshops and meetings. 

One of my favorite frameworks to teach and share is the BASIC toolkit [2]. Developed by the OECD to help apply behavioral science insights to public policy analysis, it draws on a taxonomy of ABCD — Attention, Belief, Choice and Determination — to help understand behavior through small-scale experimentation. As one of the most prevalent and useful behavioral frameworks for beginners and experts alike, BASIC is a mainstay of my teaching curriculum — and yet, though my meetings are for the time cancelled, I have never felt more connected to the material than I do now. 

It seems a common belief these days is that we will all come out of this crisis changed. For me, perhaps the biggest change has been taking material I typically teach to others and applying it to a new subject altogether: myself. 

So, let me present to you my real life, experience-based ABCD analysis of my behavior.

A for Attention

If we were as perfect as we often believe we are, we would have unlimited attention and would never forget anything. Needless to say — quite contrary to this standard of perfection — our attention is not an unlimited resource. Human attention is “scarce, easily distracted” and falls prey to several unwanted behaviors [2]. For instance, forgetting and overlooking tasks that are important (but, perhaps, unenjoyable). If I had a penny for every time I missed watering my plants in the past month, I would have enough money to employ a full-time gardener. The irony that the plants stand and plead for water right in front of me, even as I type this, is not lost on me. Maybe putting footsteps towards the plant, the way we put footsteps towards waste bins might put me on the path to keeping my plants alive. 

Our limited attention span is also the main culprit for our inability to multitask. Every once in a while, you will meet people who will floor you with their multitasking skills. Don’t feel disheartened. For most of us, multitasking places us in cognitive overload, forcing us to divide our attention. Not long ago, I was one of those people who took pride in my ability to do multiple things at once. But after a month of confinement, I now know better. Cooking while trying to reply to your mail might lead to a sweet pasta or a sour note — which may or may not appeal to your taste buds. The jury is still out on that one. 

As we adjust to the time at home, and the blurring of boundaries between our personal and professional lives, it helps to factor inattention into our timelines. Indeed, two of the most common mistakes we make in planning are, simultaneously, the systematic underestimation of the time it will take us to complete a task, and the overestimation of the benefits we will receive therefrom [3]. Known as the planning fallacy, it derives from both overconfidence in our abilities and inattention to details that may complicate our plans. 

So, if you’re planning to cook a nice meal tonight, put aside an hour for cooking and do only that. We live in stressful times, don’t make it worse by trying to do everything at once.

B for Belief

How do we make sense of the world? How do we form our beliefs? Rational choice theory would have you believe that belief formation is a logical process: we consume, process, and evaluate information, then form a belief on that basis. But that’s not always the case, is it?  

We live in a complicated world, replete with information overload [6]. Our brains do their best to process what they can, relying often on context to make sense of what’s around us. Thus, many of our beliefs will be the results of both limited processing resources and our own biased understanding of the world. And so, as expected, belief formation is not perfect. We tend to ignore relevant information that may cause dissonance; often we seek out information that confirms what we already think [9].

And as if that isn’t bad enough, emotions wreak havoc on how we consume information [8]. The quality of the emotion (i.e. negative or positive) determines how information must be consumed. Negative emotions make people seek out more negative information and vice versa [5].

I have an example for you. Sometime in February this year, I had a trip planned to Japan and I had every intention of making it to Tokyo. So, I found myself seeking out positive information about COVID 19: how many people had recovered, how many people were not affected at all. By the time I returned from Japan, the situation had deteriorated so much that my emotions had turned negative. Now, I find myself obsessively refreshing the news feed to devour the latest numbers. If you are doing that, too, don’t be too hard on yourself. Your brain is doing the best it can to process all this information while trying to manage your heart’s information needs as well.

C for Choice

Choice is a tricky one. We all feel like we are making the right choices, weighing all the necessary information and picking the right option. But behavioral science has repeatedly shown that our choices are driven by context. Whether it is the impact of framing [6], or the power of alternative options (as shown by Dan Ariely in his famous experiment on pricing for The Economist [1]), we know that choices are never made in a vacuum.  

Choices are also heavily influenced by social norms. Picking a restaurant because it has a long queue is a common example of this effect. For the longest time, I thought I was immune to social norms. Even if a hotel website told me that 49 other people were looking at the same room at the same time, I could not be pressured to give in. 

Now I know better. No, I did not panic-buy toilet paper. But yes, I did squirm uncomfortably reading about long lines in supermarkets the day before the lockdown began, till I gave in and went to buy a few basics, lest I’d feel left out. 

D for Determination

To put it simply, we are not Mahatma Gandhi. Just like attention, our willpower is not infinite. It depletes fast due to the cognitive and physical strain we operate under. For instance, I am very determined to keep fit, so I enrolled at a gym at the beginning of the year. But by March, I already see my interest waning. By May, the gym will likely be a low priority activity. What happened to my optimism from the beginning of the year? Turns out, like many people, I am present biased [4]. My shorter-term needs of having fun outweigh the longer-term need of keeping fit. Yet even still, the events of the last month have depleted my determination more than I could have expected. 

This was underscored by my persistent failure to stop one behavior: touching my face. Face touching is the femme fatale of the COVID-19 crisis — yet, no matter what I read, tried, did, I could not muster the willpower and concentration to stop doing it. The more I tried, the harder it got, the more frustrated I felt. So, I turned to a trusted tool of behavioral science: the commitment device. When trying to boost your self-control doesn’t work, try increasing the hassle factor instead. I wanted to touch my face, the mask covers my face, ergo using the mask helps me not touch my face! Determination 1, Brain 0.

Self Experimentation 

And so, dear readers, as you can see, I am now my own subject of experimentation — living in the frameworks I have been teaching in workshops. I am also now at peace with the fact that I am nowhere close to being a perfectly rational human being. In fact, I am beginning to enjoy my little quirks and irrationalities. Maybe, that’s what the new normal will be: people just accepting they are not perfect and cutting themselves, and each other, some slack. That’s a normal I can live with!

References

  1. Ariely, D. (2008). Predictably irrational. New York, NY: Harper Audio.
  2. Hansen, P. G. (2018). BASIC: Behavioural Insights Toolkit and Ethical Guidelines for Policy Makers.
  3. Kahneman, D., & Tversky, A. (1977). Intuitive prediction: Biases and corrective procedures. Decisions and Designs Inc Mclean Va.
  4. O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89(1), 103-124.
  5. Peters, E., Lipkus, I. & Diefenbach, M. A. The Functions of Affect in Health Communications and in the Construction of Health Preferences. J. Commun. 56, S140–S162 (2006).
  6. Sweller, J. (1994). Cognitive load theory, learning difficulty, and instructional design. Learning and instruction, 4(4), 295-312.
  7. Tversky, A., & Kahneman, D. (1989). Rational choice and the framing of decisions. In Multiple criteria decision making and risk analysis using microcomputers (pp. 81-126). Springer, Berlin, Heidelberg.
  8. Van Bavel, J. J., Boggio, P., Capraro, V., Cichocka, A., Cikara, M., Crockett, M., … & Ellemers, N. (2020). Using social and behavioral science to support COVID-19 pandemic response.
  9. Wason, Peter C. (1960), “On the failure to eliminate hypotheses in a conceptual task”, Quarterly Journal of Experimental Psychology, 12 (3): 129–40, ISSN 1747-0226