Imagine, if you will, the "cronut." This sugar-rolled, cream-filled, glaze-topped doughnut-croissant hybrid has been taking Manhattan by storm since being rolled out by the Dominique Ansel bakery in May. The bakery only makes about 200-250 cronuts a day, at $5 a pop—far fewer than it could sell in a given day, as evidenced by the behavior of its customers.
On its website, the bakery gives instructions for winning the privilege of buying a coveted cronut. Specifically, customers are encouraged to line up two hours prior to the bakery's usual opening time of 8 a.m. They are warned that they will only be allowed to purchase two cronuts per person, and they are asked not to do business with cronut scalpers. That's right, scalpers: So feverish has the craving for cronuts become that customers reportedly have been known to pull up in their cars and buy the pastries from line-waiters at a $30 markup.
The cronut craze may sound like another tale of New York City excess. Yet most of us have experienced the agony of waiting in a long line for the latest gadget, a hot new movie, or a table at a favorite restaurant. Whatever awaits us on the other side, we tell ourselves that standing on our aching feet for an hour or longer will be worth it.
At first glance, such long lines seem to make little sense from the seller's standpoint. Dominique Ansel says it's working to increase the number of cronuts produced each day, but again, why the wait? After all, the recipe should be easy to scale up. In fact, standard economic theory suggests that supply should match demand. When a product is popular, why not make it more easily available?
Joe Marks, then Disney's vice president of research, asked himself this question a few years ago when he visited Tokyo Disneyland and was puzzled by a particular behavior he observed there. Park visitors were standing in line, often for many hours at a time, outside a shop in the park's Frontierland. Marks found out that the customers were waiting to buy an inexpensive (less than $10) leather bracelet on which they could have a name painted or embossed. Marks wondered why the bracelets were in such demand, and, even more important, why other stores in the park weren't selling the same bracelets. Surely, Disney could improve visitors' experience by reducing their wait time! In Marks' mind, the company needed to make the popular product more easily available.
As it turned out, Marks' intuition was way off. The visitors he observed usually were standing in line with their sweetheart or spouse. The couples' willingness to patiently wait for the bracelet was a signal of their strong commitment to each other—for, according to a Japanese tradition, exchanging leather bracelets is a sign of bonding. It was the very act of waiting for the bracelet that made the product so popular. Waiting in line signaled to other park visitors that their commitment to their romantic partners was exceptionally strong.
In the same way, the painful morning wait for cronuts is likely to be contributing to the product's popularity. The fact that people are waiting signals to others that they too should be in on the trend.
Psychologists and behavioral decision scientists refer to this type of behavior as "self-signaling"—that is, making decisions that communicate to ourselves the type of person we view ourselves to be. Although we tend to believe we have an accurate understanding of who we are and what we like, in reality, we often don't have a clear sense of our own preferences. To figure them out, we observe our own behavior.
Our daily lives provide many opportunities for self-signaling. Imagine that you are approaching a homeless person who is asking for money. You could ignore him, you could give him some change, or you might even buy him a coffee. How do you think you would feel about yourself if you bought coffee for him and he gratefully accepted it? In all likelihood, you would feel proud of yourself. The act of buying the man a coffee would not change who you are fundamentally, but it would provide you with evidence that you are a generous, caring, and altruistic person. That's self-signaling—and, since behaviors carry more weight in our minds than mere words do, you are now likely to believe you are a person of high integrity.
Consider another example of the power of self-signaling from an amusing experiment that the psychologists George Quattrone and Amos Tversky conducted in the early 1980s. They welcomed participants to their lab for a study about the "psychological and medical aspects of athletics." The experimenter informed the participants that the purpose of the study was "to examine the effects of rapid changes in temperature on heart rate after exercise." They then were asked to engage in a simple task: to hold their arm in ice water for as long as they could (an experience that becomes painful within just a few seconds). After the ice water task, the participants had their pulse taken, then spent one minute pedaling a stationary bicycle. This was the first trial of the experiment.
For the second trial, they engaged in another ice water task and pulse reading. The first trial established a baseline heart rate in response to temperature change; the second measured heart rate in response to temperature change following exercise. The task was structured to mirror the situation of an athlete jumping into a cold shower after exercising on a hot summer day.
Here's where things get interesting. After the participants had gone through the first trial, the experiment told some of them that high pain tolerance is an indicator of a healthy heart. This information was convincing enough to lead these participants to keep their arms under water during the second trial for longer than they had during the first trial. Meanwhile, other participants were told after the first trial that low, rather than high, pain tolerance is a signal of good health. Members of this group kept their arms under water for a much shorter amount of time than they had before receiving this information.
Clearly, participants interpreted the length of time they kept their arms under water (whether long or short) as a sign of their healthiness. Of course, they were wrong; their heart health had been already established by Mother Nature and their lifestyle choices. Once again, self-signaling was at work.
We have all been in the position of trying in vain to make sense of the behavior of a colleague, boss, spouse, or peer. But even behaviors that seem irrational—such as waiting in line in the early morning hours for a cronut—begin to make sense when we think about the signals they send to ourselves.
Francesca Gino is a curious behavioral scientist and a professor at Harvard Business School. She is also the author of Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan (Harvard Business Review Press, 2013). Follow her on Twitter at @francescagino.
[Image: Flickr user Joyosity]