Decision Making and the Papa John’s Effect

DECISION making BIASESI have helped a number of Western companies make decisions to invest in China to start factories or other work. We use a matrix of factors that represent what the company needs in location as they try to choose.  They are all weighted appropriately by the company leaders. They never list- Is there a Papa John’s?  However, 9 times out of 10, the leaders will be influenced and choose the place with a Papa John’s  or other such familiar restaurant. All the numbers they put on the board are higher in the place where they saw more Western Restaurants.  For example: ‘Availability of Good Factory Space for Rent’ will be listed higher by them though no one mentions the Papa John’s. They talk about the objective factors and vote Papa John’s though no one explicitly is considering availability of Western pizza joints when saying how good they feel the facilities are.  I can predict how they will vote based on restaurants along the route. Unwritten decision making biases dominate.

Marketers have studied this effect. We think we are very objective.  Good marketers know better and can get us to do things that we do not expect.  I have tried once by words to get a company to not succumb to the ” sighted a Papa John’s’ priming effect. It did not help. See also Decision Making Needs Better Information.

Decision Making Biases Can Hurt US More Than We Know

Perhaps this blog will help some people with this Western Restaurants effect, but many others exist all around us. At least in bigger decisions, we need to get passed our own subjectivity by what ever help we can get. In recruiting, the big issue is not letting candidates who are good at using great buzzwords get us mystified. We need to hire on data showing how people have done at other companies rather then their use of certain phrases or showing certain enthusiasm.


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Posted in: China, Decision Making, Leadership, Market Entry

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