Lollapalooza Effect

Definition

A point where several psychological tendencies converge and elicit the desired outcome. These tendencies act in concert, feedback on one another, and can determine behavior.

Why Use It

The predictable result multiple psychological tendencies can have when they meet is powerful and can drive positive or adverse effects.

When to Use It

Learning and utilizing mental models to solve problems is excellent; recognizing how multiple can converge to form a critical mass is crucial. In this lollapalooza, you can persuade an individual to take specific actions.

One famous example is a Tupperware party. The host uses several mental models, including reciprocity, liking bias, social proof, and confirmation bias, to get attendees to purchase goods before they leave.

Reciprocity is the practice of exchanging things with others for mutual benefit. When someone does something for you, it’s natural to feel obligated to reciprocate — this is reciprocation bias. Whether the original act was needed or even asked for is irrelevant, it creates a requirement to return the favor, even when you don’t want to.

Liking bias is the preference to do business or say ‘yes’ to people you like, are similar to you, cooperate with you, or make you feel special. Friends and neighbors, for example, are prime candidates for this designation in your life.

Social proof is where individuals are influenced and mimic what others are doing — monkey see, monkey do. That effect becomes more pronounced when you are uncertain, stressed, or confused.

Confirmation bias is when a previously held belief places greater importance on any evidence that might support it in the present. As you might imagine, changing a viewpoint is harder than cementing it in the first place.

How to Use It

In the Tupperware party example, a host takes advantage of these biases to drive predictable purchasing behavior.

For starters, the host if often a friend or colleague, so liking bias is in effect from the moment you accept their invitation. You may win prizes or receive a free sample at the soiree, making you feel obligated to reciprocate the favor. Previous customers share their real experiences with the products, invoking confirmation bias. And finally, others begin purchasing goods, and now with social proof, resisting is difficult. While the most straightforward thing might be to skip the next one of these types of events, they’re a powerful tool when used correctly.

Scaffolding mental models can produce different effects depending on which ones you use. While one outcome is changing behaviors, another application of other mental models simplifies decision-making.

How to Misuse It

Taking advantage of multiple psychological tendencies, you force humans to reject their rational selves and give in to your requests. As such, it’s easy for this effect to go to ill-use — with great power comes great responsibility.

Next Step

Take a look at the latticework of mental models you’ve learned and play with how you might use three or four to create your lollapalooza. Charlie Munger noted the majority of problems would be no-brainers if viewed through the appropriate lens.

Where it Came From

Lollapalooza quite literally means a person or thing that is particularly impressive or attractive. Charlie Munger coined the term in a 1995 speech entitled Psychology of Human Misjudgement.

What Are Mental Models?

Mental models are thinking tools that help guide and shape our perceptions of the world. They simplify complexity so we can understand life better, make decisions confidently, and solve problems.

Deep Dive Into Mental Models Bi-weekly.

Deep Dive Into Mental Models Bi-weekly.

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