Kahneman made brand work easier for us
We used to talk our heads off about why it is important to appeal to emotions with brands. In 2011, with the publication of Daniel Kahneman’s bestseller “Thinking, Fast and Slow”, things got a lot easier: the accessible book made it clear how many decisions are (or need to be) made reflexively and emotionally.
Kahneman also helped us in another case: in 2012, we wanted to convince the financial industry why it was worth investing in Professor Ernst Fehr’s behavioral economics initiative at the University of Zurich. Fehr told me that four Nobel laureates in economics supported him in his endeavor. I asked him: “Would the Nobel laureates go so far as to speak in favor of Zurich on camera?” They would, and Heads was able to produce a testimonial spot featuring Daniel Kahneman, Vernon L. Smith, James Heckmann and George A. Akerlof, all of whom spoke up for Zurich The effort paid off: UBS invested CHF 100 million in Ernst Fehr’s behavioral economics research and teaching at the University of Zurich.
Back to emotions in brand and purchasing decisions. Kahneman on this in a 2013 NZZ interview (retranslated into english):
NZZ: If people do not behave rationally when making purchasing decisions as previously assumed, our market economy system may not be as efficient. Doesn’t that lead to distortions?
Daniel Kahneman (DK): “When you buy a car, you don’t just buy a car, you buy prestige and a symbolic value. Some people are prepared to pay a lot for it. They feel better with a car that signals prestige in their eyes. Such goods change the way they think about themselves. They are prepared to pay a lot for them.”
In this sense, can we also speak of utility?
DK: “Yes, luxury and prestige have a benefit for consumers. People are prepared to work hard for it.”
So it’s perfectly okay if people sometimes make decisions using only their fast thinking?
DK: “It worries me that my readers sometimes get the feeling that I think fast thinking is a bad thing. That’s not the case. I don’t believe that life would be worth living if there were no ‘System 1’. Our feelings are anchored in it, our habits, memories, friendships – most of what makes us who we are. We just have the wrong idea of who we are. We think we are mostly deliberate, reflective, rational. But most of the good things in life come from System 1.”
Kahneman died on March 27, 2024 at the age of 90. His theories remain alive. And they will probably become even more important as AI celebrates great success in “System 2”, but struggles with emotions.