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The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Mar 20, 2020

Fundamental attribution error is another example of a behavioral economics concept with a really terrible name. Similar to my choice to call “hyperbolic time discounting” the “I’ll start Monday effect” fundamental attribution error is one where I think we can benefit from a simpler name, I like to call this the “Pot / Kettle Phenomenon.” You may be able to tell from that name a little bit about how this concept works, but here’s the simple explanation and then we will get into the details.

If you have ever heard the phrase, “that’s like the pot calling the kettle black” we are basically talking about fundamental attribution error – when you use different criteria to think about yourself and how you are acting than you use to think about and judge others. Today, I explain this concept and share examples that bring it to life. I also give you an actionable five step plan to change the way you react to others and have less instances of this phenomenon. 

I’ve received an overwhelmingly positive response from listeners about last week’s episode about coronavirus and why our brains react the way they do in pandemics. If you’re still wondering why people are hoarding toilet paper, this episode will help explain why. 

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Show Notes:

  • [04:38] FUNDAMENTAL ATTRIBUTION ERROR is another example of a behavioral economics concept with a really terrible name. I prefer to call this the “Pot / Kettle Phenomenon.”
  • [05:16] “That’s like the pot calling the kettle black” is basically talking about fundamental attribution error. It's using different criteria to think about yourself and how you are acting as opposed to how you would think about others and how they act.
  • [06:16] How do you feel about someone who cuts you off in traffic? How do you feel about yourself when you cut someone else off in traffic? When thinking about yourself, you know you are a good person and this one act doesn’t carry over into your interpretation of your entire personality.
  • [07:39] When you hear the story of someone else who you may have labeled as “bad,” you'll have empathy for them when you understand their story - like the Wicked Witch of the West. 
  • [08:26] Why can't we stop ourselves from doing this and realize how often it impacts our personal and business relationships?
  • [08:39] Even when we know about the rules our brain uses to make sense of our surroundings, it doesn’t mean we can just change them.
  • [09:43] You have to use your conscious processing over the top of the thing your subconscious wants you to believe.
  • [10:01] Your brain is biased to think of you (itself) as different and better than others…especially people who are not like you. You don’t have to let that immediate reaction form a lasting impression of someone else.
  • [11:01] In the workplace, think about someone who shows up late to your meeting…what is your immediate thought about them? You likely think, “Ugh, he is so rude and disrespectful” this can then combine with the focusing illusion, so that you only notice times where the person in question is doing things that are rude and disrespectful.
  • [12:16] INTRINSIC VS EXTRINSIC The big difference between the way we see others and how we see ourselves is the intrinsic story compared to the extrinsic story.
  • [12:42] If someone’s personality or their disposition led to the lateness, it is intrinsic or internal attribution. If it was due to the situational factors, it would be external.
  • [14:37] Steps to change the way you react to others:
    • 1)  Decide you want to work on this and understand why it’s important to you.
    • 2)  Choose an initial group or person to start the process with.
    • 3)  Reframe your in-group
    • 4)  Consciously adjust to extrinsic attributes for a decent number of total interactions (30 days is a good rule of thumb for people you see often)
    • 5)  Move to the next group
  • [16:26] If you have been passed up for a promotion or been told you aren’t a team player or feel like everyone is out to get you… fundamental attribution error could be a culprit.
  • [16:44] Fixing your mindset in regards to the way you think about others is about your choice. You can’t change them or their responses to situations.
  • [19:43] In the “in-group” perspective shift, it will take a little time at first where you have to consciously remind yourself to not have an “us versus them” mentality.
  • [22:58] Resist the urge to use the same “good thing about them” every time.
  • [24:21] Once you have completed the process with the first group you can move on to the next one. And the good news is, this should get easier over time. Unlike other goals which need to be limited, this can combine and add other groups where you start to use these techniques whenever you are ready. It is a positive snowball.
  • [26:00] I want to talk a little about the flip side of the Pot / Kettle Phenomenon. It's important to look at your own behavior the way others do. Try to stop writing an extrinsic story for why it is ok.

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