Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Wednesday, April 9, 2014

The Wolf of Wall Street


In a negotiation situation, one party tries to make the other party comply to him/her and get the most benefit out of the situation. 

In this movie scene, Jordan Belfort is a young but sophisticated stockbroker trying to sell penny stocks to his client. All other staff in the firm was shocked by the fact that he sold 40000 shares to a client in one go. We can see that he used some very useful negotiating tactics which would make people comply to you in an intercourse. 

The two main tactics he used were consistency and scarcity.

At the beginning, he mentioned that John himself asked for ‘a stock which has huge upside potential but very little downside risks’. Which set a consistent theme for their conversation afterwards. In psychology, consistency is a useful tool in compliance. Know and Inkster (1968) did and experiment and found that punters at racetrack are more confident that their horse will win immediately after placing a bet than just before placing the bet. This theory implies that people are more likely to act in ways that are consistent with earlier choices they made. In this case, John, the client asked for the recommendation earlier and therefore more likely to comply to the selling later on. 


Belfort also uses clients that the stock he is introducing now is the best he ever seen in the last six months. Which created an impression that this stock is a good one to miss. The weapon of sacristy role has been commonly used in selling and negotiations. 
 Brehm and Weintraub did a study on two groups of two-year old boys. One group of them saw two equally attractive toys separated by a piece of glass that they could reach over, the other group saw the toy separated by a larger piece of glass that would obstruct their attempts. The result showed that boys in the first group showed no special preference while the second group got to the restricted toy three times faster than those in group 1. 

Having these negotiation skills in his pocket, no wonder Jordan Belfort became one of the most famous motivational speaker and stockbroker in the America!


Reference:

Brehm, S. S. & Weintraub, M. (1977). Physical barriers and psychological reactance: Two-year-old’s response to threats of freedom. Journal of Personality and Social Psychology, 35, 830-836. 


Pratkanis, A. R. (Ed.). (2007). Social influence analysis: An index of tactics. The Science of Social Influence: Advances and future progress. New York: Psychology Press

Blog 5
By Regina Yeung (1123162)

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