Reciprocation is an act of doing something in return. We reciprocate both good and bad things. If someone invites us to a party, we invite them back. If someone did not treat us well, we do the same thing to them. We are obligated to reciprocate. Richard Leakey archaeologist, ascribes the essence of what makes us human to the reciprocity system.
We are humans because our ancestors learned to share their food and their skills in an honored network of obligation.
It is this obligation, makes one person to give something to the other. If this was missing why would anyone help? I think of this as IOU – I Owe You. There are various ways by which reciprocation can be misused against us.
How I was sold a Life Insurance Policy
Several years back, an agent from an insurance company visited my house. He wanted me to buy a life insurance policy which will cost Rs 5000/- per month. Those days it is a huge sum and I rejected. He backed off and asked me to take another policy which will only cost Rs 500/- per month. I thought for a minute and I agreed. Why?
- I thought he was doing me a favor by offering me a cheaper policy.
- Rs 500/- per month is much smaller than Rs 5000/- per month. Yes it is Contrast Mis-reaction tendency.
After purchasing the policy, I thought I made a smart decision. But I was a victim and the agent was smart. Several years later I came across this term ‘ask-for-a-lot-and-back-off’ in Charlie Munger’s speech on ‘Psychology of Human Misjudgment’
It is so easy to be a patsy for what he calls the compliance practitioners of this life. At any rate, reciprocation tendency is a very, very powerful phenomenon, and Cialdini demonstrated this by running around a campus, and he asked people to take juvenile delinquents to the zoo. And it was a campus, and so one in six actually agreed to do it. And after he’d accumulated a statistical output he went around on the same campus and he asked other people, he said, “Gee, would you devote two afternoons a week to taking juvenile delinquents somewhere and suffering greatly yourself to help them,” and there he got 100% of the people to say no. But after he’d made the first request, he backed up a little, and he said, “Would you at least take them to the zoo one afternoon?” He raised the compliance rate from a third to a half. He got three times the success by just going through the little ask-for-a-lot-and-back-off.
Think before using free samples
I have tasted free sample foods in Costco and several other stores. There are 2 reasons why free samples are given
- We will have first hand information about the product.
- To make us obligated, by offering the sample for free. Hence we will reciprocate by purchasing the item.
Amway makes use of the free sample in a device called the BUG. The BUG contains a collection of its products like detergent,shampoo, window cleaners etc. The salesperson give this bag to the customers for 2 to 3 days, to try out these products for free. What happens after 3 days. Several customers will purchase the products. Why? Rule of Reciprocation. Excerpt from Influence by Cialdini
Reports by state distributors to the parent company record a remarkable effect. Unbelievable! We’ve never seen such excitement. Product is moving at an unbelivable rate, and we’ve only just begun… [Local] distributors took the BUGS, and we’ve had an unbelievable increase in sales[from Illinois distributor]. The most fantastic retail idea we’ve ever had!… On the average, customers purchased about half the toal amount of the BUG when it is picked up… In one word, tremendous.
Politicians and Freebies
Around 1.5 Million Laptops were given away for free in Uttar Pradesh, a state located in Northern India. Why? This was the promise given to the voters, by the political party before the elections. This would cost over 550 million dollars for the state government. Where will this money come from? I do not know that. But politicians definitely understand the power of reciprocation, in winning the elections.
Learning from Sam Walton
In Walmart, Sam Walton won’t let a purchasing agent take a handkerchief from a salesman. He knows how powerful the subconscious reciprocation tendency is.