The Psychologist’s Fallacy and Your Business. - Bruce Turkel

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Back in 1996 I was browsing the shelves of a bookstore (remember them?) when I happened across Caleb Carr’s novel The Alienist. I was already a big fan of historical fiction, especially concerning the Victorian age, and the book became an instant favor of mine.

My memory of it was so strong that when I was straightening up my bookshelves recently and came across it I started reading it again almost immediately – sitting cross-legged in the pile of books, magazines, and car models I had pulled down from the shelf. Only once I was halfway through the Carr’s book did I discover that the novel is now available both on Audible and has been turned into a mini-series on TNT.

One of the points I remember from my first reading of The Alienist is the concept of The Psychologist’s Fallacy.  The Psychologist’s Fallacy describes the error that is made when an observer (in this case, a psychologist) concludes that their interpretation of something is actually the objective explanation of that occurrence.

I found that so interesting because of its current relevance. Also because there is a similar theory in marketing called The Self-Referencing Criteria, or, more casually, A Survey of One. Just like The Psychologist’s Fallacy, Self-Referencing Criteria explains the phenomenon that occurs when a marketer believes his or her consumers do (or don’t do) something simply because that’s how the marketer themself would act.

And it’s not just marketers, it’s all of us. Any time you’ve commented on someone’s actions with the words, “…well I’d never do that” or “…anyone can see that…” you’re applying a self-referencing criteria to the act you’re observing. At the same time, you’re assuming that your own subjective opinion is actually an objective truth.

The difference between the two was neatly summed up in politician and diplomat Daniel Patrick Moynihan’s famous quote, “you are entitled to your own views, but you are not entitled to your own facts.”

Think about your reaction to the Coronavirus crisis, for example. If you are healthy, have no comorbidities, haven’t seen a reduction in your finances, and don’t know anyone who has fallen ill or died from Covid-19, you may think our response to the contagion is an over-reaction and wonder when we’re just going to get on with our lives.

If, on the other hand, you are particularly vulnerable, have seen a dramatic loss in income or have lost family or friends to the pandemic, you probably have a very different idea of what’s going on.

These differences in opinion can affect not just your health, but how you spend your time and money, how you run your business, and even how you vote. And just as your own particular experiences and opinions affect your actions, they also affect 365 million other Americans’ behavior too.

Understanding The Psychologist’s Fallacy becomes particularly important if you’re trying to sell your products, entice your customers or get yourself or someone else elected to public office. If you ignore this phenomenon, by believing that your subjective opinions are not only correct but that other’s conflicting opinions are therefore incorrect, you do so at your own peril.

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