One interesting phenomena are ICO’S in the cryptocurrency (a decentralised virtual currency)
field. An initial coin offering (ICO) is a method of crowdfunding, which can be a source of capital for a company. These ‘tokens’ supposedly become functional units of currency if or when the ICO’s funding goals are met and the project launches. There are thousands of different ICO’s are what’s interesting are the persuasion techniques they implement to try and make you invest.
A sense of hierarchy suggests certain ICO’S are better than others that is established within the investor. The gold ICO’S are suggested, but not mentioned to be a better investment than the silver ones. Numerous studies have explored the role of authority (Milgram, 1963; Burger, 2009) and subsequent alteration of behaviour. A professional website that places specific ICO’s into categories, more than likely gives off the impression that reasons behind placement for each ICO derive from well-established authoritarian figures. Many ICO’S even offer deals, such as two for one if you buy now, all suggesting an investment seems only logical.
A description is also provided which incorporates the persuasion technique of scarcity. A closing date is provided for each ICO, which creates a feeling of emergency to any potential investor. The ICO presents itself in limited stock, and that an investment must be made soon before the closing date. Studies have shown that people often choose items that are of limited-quantity (Aggerwal, Jun, & Huh. 2011). When you combine these persuasion techniques & the promise of making quick money, many individuals may feel in-overly pressured to invest. This is particularly worrying when you take into consideration some ICO’S that were discovered to be PONZI schemes (fraudulent investment operations).
Bitconnect – losing almost all its value in ONE day after it was revealed it was a Ponzi
Burger, J. M. (2009). Replicating Milgram: Would people still obey today? American Psychologist, 64, 1–11.
Milgram, S. (1963). Behavioural study of obedience. The journal of abnormal and social psychology, 67, 371- 378.