1. IIeX So Paulo Game Theory and Emotional Measurement

2. Game Theory Game theory is defined as the study of strategic decision making :-"the study of mathematical models of conflict and cooperation between intelligent, rationaldecision-makers. John von Neumann used Brouwers fixed point theorem to prove mixed-strategy equilibria in two person zero-sum games. Ludwig von Mises PraxeologyEconomics, the study of human choice under conditions of scarcity, can be treated as aspecialization of praxeology, the study of all human action. Herbert Simon SatisficingHuman beings lack the cognitive resources to optimize. A more realistic approach to rationalitytakes into account these limitations : This is called bounded rationality. Duncan Watts The Micro-Macro problem in social science is what distinguishes Physics,Chemistry and Biology simply scale? Is Big Data going to kill methodological individualism? HasGranovetters Riot Model already done so? The paradox of common sense is that, even as it helps us to make sense of the world, it can actively undermine our ability to understand it Our mental model of individual behaviour is systematically flawed and our mental model of collective behaviour is even worse! We learn less from history than we think we do and because we remember things as stories, we treat them as if they have predictive power. 22 3. We thinkmuch lessthan wethink wethink3Jan3 11 4. Implicit has greater processing power (and is less effortful) We are not thinking machines that feel; we are System 2 50 bit/secfeeling machines thatthink Antonio Damasio11,000,000 bit/secSystem 14Zimmerman, M. (1989) "The Nervous System in the Context of Information Theory". 5. Intuitive Judgement A bat and a ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?People are not accustomed to thinking hard, and are often content totrust a plausible judgement that quickly comes to mind.Daniel Kahnemann, Nobel Prize Winner55 6. 6 7. Human behaviour driven by two independent brain systemse=mc2 System 2System 1 Slow Fast Analytical IntuitiveLearnedInstinctive PropositionalMetaphoricConscious Unconscious 7 7 8. DECISION 9. 99 10. SocialPeople pay2.76 times more onaveragewhen eyesare present 10 Bateson et al, 2006 11. 11 12. Personal Visceral State12 13. As seen in Lie To Me TV Series based on Paul Ekmans work13 13 1 3 14. FaceTrace - Measuring Emotional Appeal Which of these faces best expresseshow you feel about this ad?Contempt To what degree did this ad make you feel [selected emotion]? Sadness SurpriseAnd what was it about this Neutralad that made you feel this way?Happiness AngerCaptures Reasons for Emotion2007 2007 Fear Disgust 2007 2007 2007Award AwardAwardWinner 1BrainJuicer 2006Winner Winner 141414 15. Think carefully about the type of happiness you want to evokefor your business objectives early on in campaign developmentHappiness Types: Business vs Intermediate Effects 3.50 Awe-inspiredNo. of very large intermediate effectsGrateful/appreciative 3.00 Ecstatic/blissful 2.50 Excited UpliftedContented 2.00 Proud Sensorially RelievedJoyful over 1.50 pleased others misfortuneAmused 1.00 1.00 1.50 2.00 2.50 3.00 No. of very large business effects 15Base: 18 ads for which business effectiveness data is available from the IPA 16. Guide to Likely Business Effects Blockbuster Profit gain extremely likely Share gain very likely ROI Index Reduced price sensitivity likely = 160-180 Viral potential in some cases Must See Profit gain quite likely Share gain likely ROI Index Solid Performance Profit gain possible = 115-120 Share gain potential limited Pedestrian Negative return on marketing investment quite likely Straight to VideoSystemSystem Negative return on marketing 1+2 1 onlyinvestment likely 16 16 17. Explaining humanity? EmotionMessage take-out, persuasion, brand recall 17171 18. DECISION 19. Turning human understanding into business advantageJohn Kearon, Chief Juicer 1919 20. And again in English Please! We arent intelligent or rational decision makers We are influenced by other people We are often better at understanding and predicting the behaviour of other people thanat predicting our own We usually dont know the relevant probabilities of outcomes We can rarely evaluate all the possible outcomes with sufficient precision Our memories are weak and unreliable Context is everything If your house burns down in a freak fire you are devastated but if your whole city is destroyed in an earthquake and hundreds of your neighbours die then you feel lucky to be alive! (If I want to make this sound smarter I call it the theory of relative deprivation) Emotion drives our behaviour so if you want to turn human understanding into businessadvantage then measure emotion20 20