Reciprocation#

Rule for Reciprocation

We should try to repay, in kind, what another person has provided us

Simply put, people are obliged to give back to others the form of a behavior, gift, or service that they have received first. For example, if a friend invites us to their party, there is an obligation for us to invite them to a future party we are hosting. If a colleague does us a favor, then we owe that colleague a favor. And in the context of a social obligation people are more likely to say “yes” to those who they owe.

One of the best demonstrations of the Rule for Reciprocation comes from a series of studies conducted in restaurants. When we visited a restaurant, there is a good chance that the waiter or waitress will have given us a gift. Probably about the same time that they bring your bill. A liqueur, perhaps, or a fortune cookie, or perhaps a simple mint. Does the giving of a mint have any influence over how much tip we are going to leave them? Most people will say “no”. But that mint can make a surprising difference. In the study, giving diners a single mint at the end of their meal typically increased tips by around 3%. Interestingly, if the gift is doubled and two mints are provided, tips don’t double. They quadruple - a 14% increase in tips. But perhaps most interesting of all is the fact that if the waiter provides one mint, starts to walk away from the table, but pauses, turns back and says, “For you nice people, here’s an extra mint,” tips go through the roof. A 23% increase, influenced not by what was given, but how it was given.

TIP

The key to using the Principle of Reciprocity is to be the first to give and to ensure that what we give is personalized and unexpected.

Human societies derive a truly significant competitive advantage from the reciprocity rule, and consequently the political authorities make sure their members are trained to comply with and believe in it. As a result, there is general distaste for those who take but make no effort to give in return, and we will avoid being considered as such persons. It is those attempts of such avoidance that individuals find opportunities to take advantage of on us

Although we all agree that people are more willing to do a favor for someone they like, under the rule of reciprocation, even the relationship between liking and compliance was completely wiped out, demonstrating the overpowering effectiveness of the rule. For those who owed somebody a favor, it made no difference whether they like that person or not; they felt a sense of obligation to repay him.

People we might ordinarily dislike, such as an unwelcome sales operator, disagreeable acquaintances, or even an unpopular organization, can greatly increase the chance that we will do what they wish merely by providing us with a small favor prior to their requests. Such small favor could be the “free sample” in marketing fields, a free book, or even a flower, or even the acceptance of a refusal followed by a smaller compliance request.

One feature of the reciprocity is that a small initial favor can trigger a substantially larger return favor. This is often exploited by manipulators. The reason for us to accept such unfair exchange is that most of us find it highly disagreeable to be in a state of obligation. It weighs heavily on us and demands to be removed. For this reason alone, we may be willing to agree to perform a larger favor than we received, merely to relieve ourselves of the psychological burden of debt.

Commitment and Consistency#

IMPORTANT

Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment

Motivated by the human tendency for continuous commitment, People’s desire for consistency has been a central motivation of our behaviors, because a high degree of consistency is normally associated with personal and intellectual strength while inconsistency is commonly thought to be an undesirable personality trait. It is at the heart of logic, rationality, stability, and honesty.

On the other hand, this highly-valued good personal consistency can be disastrous when it occurs unthinkinly. First, it offers a shortcut through the density of modern life. Once we have made up our minds about an issue, stubborn consistency allows us a very appealing luxury: We really don’t have to think hard about the issue anymore. We need only believe or do whatever is consistent with our earlier decision. We do so the allure of such a luxury allows us a convenient, relatively, effortless, and efficient method for dealing with complex daily environments that make severe demands on our mental energies and capacities. Second, when we are desperately longing for a solution and spot a one that we think should solve the problem, the tendency of becoming consistent pushes us to our comfort zone by ignoring any other rational opposing view. In this case, automatic consistency shields us against any painful yet meaningful thoughts.

Such consistency can also be exploited by those who would prefer that we not think too much in response to their requests for our compliance. The author mentions the example of toy companies’ strategy to boost post-Christmas sales. Normally, people over-spend during Christmas season which resulted in low sales during post-Christmas period. The toy companies did the trick with pre-Christmas TV advertisement that shows attractive Christmas toys for children. The parents would normally promise the advertised toy as Christmas gift for them. But later the toy companies undersupply the stores with these toys and substitute them with other toys of equal values and re-advertise those toys that have gotten the parents to promise. In the end, the toy companies make double-money with the substitutes and the original toys.

The key for this Psychological trick is to trigger an initial commitment that would set the stage for automatic and ill-considered consistence with that initial commitment, which could be invoked by various strategies, including asking people to simply make an oral promise before a call of action (door-to-door charity example)

The initial commitment can be very small. During the war between nations A and B, many captured A soldiers were held in POW camps run by nation C. Instead of the brutality favored by nation B, nation C employed a “lenient policy” that was a sophisticated form of psychological manipulation, relying heavily on the principles of commitment and consistency. The key to their approach was a start-small-and-build strategy.

They would begin by asking prisoners to make small, seemingly harmless statements that were slightly critical of the nation A or favorable to nation C. For example, a prisoner might be asked to agree that “nation A is not perfect.” Once this small commitment was made, C interrogators would gradually push for more significant acts of compliance. This might include:

• Elaborating on their initial statement.
• Writing and signing a list of “problems with Nation A.”
• Reading that list aloud to other prisoners.
• Writing a detailed essay on the topic.

This gradual escalation of requests led many prisoners to collaborate without ever experiencing harsh physical coercion. A prisoner who wrote an essay without being threatened might later rationalize their actions and change their self-perception to be consistent with their deeds, leading to even greater collaboration. As a result of these tactics, a vast majority of nation A POWs collaborated with the enemy in some form, with the Chinese using these seemingly trivial actions to their advantage.

IMPORTANT

The story of POW strongly resonate with Randall L. Bytwerk’s Bending Spines - The Propagandas of Nazi Germany and the German Democratic Republic who states the following in its introduction:

A pastor who lived through the Third Reich described his meetings with Nazi officials in a way that illuminates life in totalitarian societies: “[O]ne would be pushed further, step by step, until he had crossed over the line, without noticing that his spine was being bent millimeter by millimeter.” The Nazis he met with knew that persuasion is a gradual process with many methods.

Bytwerk, in his book, examines how two different totalitarian regimes used propaganda to control their populations and why, despite initial successes, their efforts ultimately failed.

Bytwerk argues that outsiders often make 2 key mistakes when interpreting the propaganda of these regimes. The first is the assumption that it was successful simply because it was backed by a police state and people were afraid not to comply. Bytwerk suggests that while coercion was a factor, such assumption oversimplifies the issue. He corrects this by explaining that totalitarian movements, like Nazism and Marxism-Leninism, presented a persuasive, pseudo-religious worldview that provided a complete explanation for all aspects of life. This holistic ideology gave people a reason to accept the status quo, and the propaganda used a wide range of persuasive techniques beyond fear, from subtle suggestion to overt violence. The second is the belief that propaganda fully persuaded the majority of citizens, leading to a widespread, genuine belief in the regimes’ ideologies. Bytwerk’s correction is that propaganda wasn’t about making people staunch believers; it was about getting them to act as if they were. It created a “hegemonic metanarrative” or a shared public reality that was difficult to challenge.

The book’s central conclusion is that these systems ultimately failed because their propaganda, despite its initial success in bending spines, was unable to deliver on its promises and expected more from people than it could realistically get, leading to a disconnect between the official narrative and the people’s lived reality.

The POW trick has also been widely used in business world and has a dedicated name called foot-in-the-door technique. For the salesperson, the strategy is to obtain a large purchase by starting with a small one. The foot-in-the-door also reveals a much profound effect on our behavior. From the example of keeping California beautiful, the main force that drives the request compliance is the feelings: a person’s feelings about getting involved or taking actions can be changed with such small request and, as a result, will start being consistent with their newly formed self-image. On the exploitation side, this would mean being very careful about agreeing to trivial requests_.

Incrementalism

Those who take one step further from the “foot-in-the-door” and could easily notice a trade-off here:

• We can request a big compliance with a high failure risk, or
• We can request a small compliance with a high success rate but at the expense of longer waiting time used for laying out the bigger request later

This trade-off reveals a principle of risk versus reward, a fundamental concept in Decision Theory, Economics, and Philosophy. It highlights that the potential for a greater reward (securing a larger request immediately) often comes with a higher risk of failure. Conversely, a lower-risk strategy (the “foot-in-the-door” technique with a small initial request) offers a higher chance of success but delays the ultimate goal, requiring patience and a longer-term approach.

The trade-off also touches on the principle of incrementalism, which suggests that change or progress is best achieved through a series of small, manageable steps rather than a single, large leap. In the context of the foot-in-the-door technique, this means that securing a small commitment from a person makes them more likely to agree to a subsequent, larger request. This is because people tend to want to maintain consistency in their behavior and self-perception; having already complied with a small request, they are more likely to see themselves as helpful and agreeable, making them more receptive to the larger request.

Ultimately, this psychological observation reflects the philosophical idea that strategies for achieving a desired outcome must balance the immediate potential for success against the long-term investment of time and resources. It’s a pragmatic application of the idea that a series of small victories can lead to a larger one, and that a guaranteed small gain may be more valuable than a risky large one.

In his video “The Power of Marginal Gains,” Stephen Duneier provides a summary of his book’s core philosophy. He argues that ambitious goals can be achieved not through special talent or skill, but by breaking down large, daunting challenges into small, manageable decisions:

The video is essentially a public presentation of the central ideas found in Stephen Duneier’s book, AlphaBrain: How a Group of Iconoclasts Are Using Cognitive Science to Advance the Business of Alpha Generation, which focuses specifically on applying cognitive science and incremental improvements to the world of investing. The book suggests that achieving significant success is not about finding a single “magic bullet” but rather about a series of small, incremental improvements to one’s decision-making process. The cumulative effect of these small gains can be immense over the long run.

In ethics, incrementalism is often referred to as the “slippery slope.” This concept describes how a series of small, seemingly harmless ethical compromises can gradually lead to a person committing more significant moral transgressions. The slow, subtle nature of the change makes it difficult to recognize when a critical ethical boundary has been crossed. This is the underlying mechanism behind the aforementioned POW tricks. The philosophical principle underlying incrementalism is that gradual and cautious progress is a more effective and stable way to achieve complex change than radical, revolutionary leaps. It’s a pragmatic philosophy that favors adaptation and learning through experience over abstract, all-encompassing theories.

In the world of business, large projects follow some type of strategic planning, there is normally a need to allocate time to plan the project in order to avoid “fire fighting”, in other words the avoidance of time delaying issues. In contrast to other systems of planning such as top down, bottom up, and so on, incrementalism involves concentrating on dealing with the immediate problems as they arrive and avoiding trying to create an overall strategic plan. This means muddling through the issues at hand based on importance.

Strategic implementation is a very well thought out plan of implementation that is the opposite to incrementalism. Although the plan involved with the strategic implementation might work incrementally it has set objectives at set times with little to no intention of muddling through the process. In other words, every part of the implementation would be expected and planned for ahead of time.

Getting to the heart of what a person’s core philosophy means for their professional life, based on a comparison of their respective cultures, an incrementalist/libertarian mindset is generally more suited to a startup environment than a large corporate one. Startups are often described as “speedboats” compared to the “tanker ships” of corporations. Their core characteristics directly align with an incrementalist/libertarian philosophy:

• Agile and Adaptive: Startups must pivot quickly to survive and find product-market fit. This requires an incrementalist approach where strategies are tested, adjusted, and refined in a continuous feedback loop. This is the opposite of a rigid, multi-year plan.
• High Autonomy and Individual Impact: Startups typically have flat hierarchies and fewer layers of management. Employees are given significant autonomy and are expected to wear multiple hats and take ownership. This appeals to the libertarian belief in individual self-determination and freedom of action, where your direct contributions have a visible and immediate impact on the company’s success.
• Risk Tolerance: Startups inherently embrace risk, viewing it as a necessary component of innovation. They are comfortable with making decisions with incomplete information and are not afraid to learn from failure, a core tenet of an incrementalist process.

For someone who aligns with an incrementalist/libertarian philosophy, a startup offers a work environment where their natural inclination toward adaptability, autonomy, and continuous learning is not just tolerated, but actively required for success. In a corporate environment, they can still thrive by acting as an agent of change and a champion for more modern methodologies, but they will likely need to actively navigate and justify their approach to a culture that may favor a different way of working.

It should be noted that not all small request (commitments) affect self-image. Those that are bear certain conditions. What are those conditions? Our best evidence of what people truly feel and believe comes less from their words than from their deeds. Observers trying to decide what a man is like look closely at his actions. The POW trick reveals the following type of acts that can alter the self-image:

• Writ it down

Principle of Social Proof#

American public hates canned laughter in television shows. Why, then, is canned laughter so popular with television executives? Experiments have found that the use of canned merriment causes an audience to laugh longer and more often when humorous material is presented and to rate the material as funnier. In addition, some evidence indicates that canned laughter is more effective for poor jokes. Why would we laugh more given the mechanically fabricated merriment? The book answers this question by introducing The Principle of Social Proof (PSP):

The Principle of Social Proof

One way we use to determine what is correct is to find out what other people think is correct

Example of PSP:

• how fast we drive on highway
• how to eat the chicken at a dinner party
• the actions of those around us

The PSP explains why, on commercial product websites, we see they list companies that are using the products - we see using their products as more appropriate when others are doing the same thing. In the case of canned laughter, we use other’s laugh to help decide what is humorous and when mirth is appropriate. The fact that we laugh based simply on a patently fraudulent laughter shows that people can exploit our preference for shortcuts, our tendency to react automatically on the basis of partial evidence. One example is the aforementioned “cheep-cheep” of baby turkey. The mother turkey gets fooled by the sound because it makes judgements based only on the sound.

More examples of PSP:

• Bartenders often “salt” their tip jars with a few dollar bills at the beginning of the evening to simulate tips left by prior customers and thereby to give the impression that tipping with folding money is proper barroom behavior
• Advertisers list “best-sellers”
• Charity uses incessant listing of donors
• Salesmen are taught to spice their pitches with numerous accounts of individuals who have purchased the product (“Since 95% of the people are imitators and only 5% initiators, people are persuaded more by the action of others tha by any proof we can offer”)

Liking#

A social rule - we most prefer to say yes to the request of someone we know and like.

“It’s gotten to the point now where i hate to be invited to Tupperware parties. I’ve got all the containers I need; and if I wanted any more, I could buy another brand cheaper in the store. But when a friend calls up, I feel like I have to go. And when I get there, I feel like I have to buy something. What can I do? It’s for one of my friends”

Examples:

• charity (P127)
• Endless-chain sales strategy (P128)

Scarcity#

Scarcity Principle (SP) - Opportunities seem more valuable to us when their availability is limited

The idea of potential loss plays a large role in human decision making. People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value (e.g. homeowners told how much money they could lose from inadequate insulation are more likey to insulate their homes than those told how much money they could save).

A reason that SP works is because as opportunities become less available, we lose freedoms; and we hate to lose the freedoms we already have:

Fundamental of Psychological Reactance Theory - Whenever free choice is limited or threatened, the need to retain our freedoms makes us desire them (as well as the goods and services associated with them) significantly more than previously

Metan Tape#

Doubling the price of a never-sold jewelry triggered the sold-out of it -> there is a pattern “expensive = good quality” -> There is a specific feature of some identity that triggered human actions (purchase expense jewelry)

The pattern is triggered a tap of actions from us

We have our preprogrammed tapes; and, although they usually work on our advantage, the trigger features that activate them can be used to dupe us into playing them at the wrong times.