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Insider: Discussing Cognitive Dissonance

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After writing my last article, I have been discussing the topic with my Psychology teacher and she was very interested in the subject. I have picked her brain on it and I appreciate the time she is glad to spend discussing topics like these.

PTQs And The Live Trading Floor

I have been trading a lot during the PTQ's and GPT's here in Ireland which connects me with many players from far away since the PTQ was at the other side of the country. I finished 14th (4-2) getting my losses early in the PTQ. In the mean time, I hit the trading floor as well. I managed to sell my Time Spiral Boosters, obtained from a Gift Box I bought in Estonia, for a decent margin.

Recently I have been noticing that shock duals are still a fast moving item among traders here, and their price memory is way above the real value. I also noticed that the use of smartphones is at an all time low here, making it possible for me to utilize my price knowledge edge, especially when wanting to trade away RtR cards for Modern and Commander cards.

For instance, the blue Zendikar fetchlands have recently doubled in price across all European markets. Even MagicCardMarket raised their prices to 19/20 respectively for an English, NM Scalding Tarn or Misty Rainforest. Some months ago when it was off-season I hope everyone picked these up for 50-60% of their current prices.

Cognitive Dissonance

I made a trade with a fellow EDH player who is an exchange student here in Ireland. He spices up the EDH games a lot as several decks in our small group keep each other in check. He got his binders from his parents and he wanted to initiate a trade with me after the Commander games. After pulling some cards we were using price memories more than pinpoint ratings. We agreed on rating his Tamiyo at 15. He picked some EDH cards from my binder and we tried to work out the prices. In the end we made the trade, both expecting it was more or less equal value.  Now, I always evaluate my trades later on to double-check if the ratings I cited with my trading partner were accurate.
So in this case Tamiyo is now $27 on TCGplayer Mid average index. BlackLotusProject is currently down for me while writing this article so I have no information from there.

I have to note that I agreed on a rating of 15 for a single Tamiyo copy because I simply saw them priced this way before Return to Ravnica made them popular among Standard players. I wound up around $20 up in the end by doing this trade, but knowing he offered the trade, I made sure he was satisfied with it as I was seeking no profit from him, just exchanging cards that move relatively more easily than the cards he picked.

Some days later he sent me a private message on Facebook saying the following: ‘’Just noticed Tamiyo is actually like $27. Wanna cut me a deal next time we trade?’’. In 1957, Leon Festinger wrote the theory of cognitive dissonance in which he states that ‘a powerful motive to maintain cognitive consistency can give rise to irrational and sometimes maladaptive behavior’.  Furthermore he argues that as soon as we experience an unpleasant dissonance, we are extremely motivated to reduce or eliminate it. Relating back to the trade, my trading partner found out that certain cards were actually higher than he thought, evoking a sense of dissatisfaction that led him to messaging me on Facebook.  We as traders mostly rely on repeat trade partners when at a local game store. We do not have infinite people to trade with. We can trade by post, having access to the international market but it comes with lag, a shipping cost burden and so on. You also tend to play against the same players in the local game store, you interact with them and with some you also playtest.

It is vital to have a healthy environment to trade in. I feel like a salesperson where I have to keep my trading partners satisfied that the cards they traded for from me are in good condition (near mint), are useful for them (not only trading for its own sake, or only trading for value), and also give them a feeling that they did not get sharked out. One way people try to guard themselves is by using smartphones when trading. This is far from ideal and I could devote a whole article to this particular topic. I am sure that other authors already have expressed their views on this phenomenon.

The reason I am writing about Cognitive Dissonance in relationship with Magic is that we as speculators can fill both roles. We are both the demand and the supply. We trade or sell cards for profit to other Magic players. We want them to be satisfied with the purchase as much as possible to prevent ourselves from hurting long-term profits as a result of dissatisfaction. This can be a full refund or simply an exchange of cards (additional shipping cost). We are also buying cards mainly from stores in relatively big quantities to acquire underappreciated cards. So we can experience something that creates dissonance. For example, in a big order I made with one of the smaller (and cheaper) UK stores, certain cards were stamped or not in near mint condition. I emailed the owner, citing the state of those cards and my reason for dissatisfaction. I did not even have to send the cards back to get a full refund, but one can see where I am going in terms of unnecessarily losing profits.

I am sure we are on the other side as well where, for example, I forgot to include a card in a relatively big trade. Aside from slightly damaging my reputation, I also had to pay extra for the shipping cost and devote time to make sure my trading partner didn't feel ripped off despite my many references.

I am not going to write about the possible solutions one can employ to deal with this kind of situation. I feel there is no "best way" as Frederick Winslow Taylor put it back in the days when he wanted to optimize industrial efficiency. I think that there are several best ways and through interaction we can be better aware of the situation. I am quite interested to hear your opinion, as this article is just one view on the matter.

Thanks for reading and as always, if there is anything you would like to discuss, please reply!

 

Gervaise

Gervaise Pechler

My name is Gervaise Pechler, a 22 year old Business & Psychology student, avid trader & I love playing Magic. I like to combine Psychological, Business & Economical aspects in my writings

View More By Gervaise Pechler

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14 thoughts on “Insider: Discussing Cognitive Dissonance

  1. Sometimes I fall into the dissonance trap when bidding on eBay items. I’ll get so excited about winning a particular auction and if I am outbid in the last second, I feel cheated and dissatisfied. So in order to reconcile this perceived “loss” I often search for the cheapest Buy it Now listing on eBay for that same item. If the cheapest Buy It Now price is below the ending auction price, I will immediately buy it both with the hope of getting a deal and also to eliminate my loss.

    The same thing happens when I trade away something I am speculating on. Last week I traded away a couple Arid Mesas. I always like having some [non-blue] Zendikar fetches in my binder because I know they are safe to hold and destined for a price increase. So when I trade a couple copies away, even if I get a great deal, I feel like I immediately need to go home and buy a couple back to refill my stock. This dissonance may lead me to paying slightly more than I’d need to otherwise in order to fill the gap in my binder.

    Do these seem like consistent examples with your article?

    1. Hey Sigmund, thank you for giving me some examples of your own. Festinger (1957) wrote his hypothesis in his Theory of Cognitive Dissonance ( http://goo.gl/OcC2l ) that:

      1. The existence of dissonance, being psychologically uncomfortable, will motivate the person to try to reduce the dissonance.

      2. When dissonance is present, in addition to trying to reduce it (1.), the person will actively avoid situations and informations which would likely to increase the dissonance

      Simply put there is a Consistency between what a person knows and believes and what he/she does (behaves). If you believe college education is good, most likely you will pass it to your children and/or other people.

      I think the first example you provided has mostly to do that your Emotions (excited , cheated, dissatisfied, chasing losses, hope) take over your Mind ( your excellent speculation on a particular card based on empiric information etc. ). This is another form of ”tilt”. Most people think ”tilt” is very aggressive which in certain degree is. But tilt is also something that makes us do things that are in retrospect quite unexplainable ( what was I thinking? ). Remind yourself that when doing an auction, you do NOT own the product yet hence one should NOT think about already owning it and especially NOT think about the things you can do with the product or the potential profit generated. Rationalizing yourself that you did not make any perceived loss is important for you

      In terms of chasing losses, if time is in your favour, I would take your time before acquiring the actual product when you missed an auction. There is for sure another opportunity at a later date to acquire it at an even lower price especially when you think this auction just triggered a price war. That mostly means that the auction ended on 25 for simplicity sake, the ”cheapest” Buy it now option is 22 , that seems to be a good deal?

      But what if Auctions in average just end around 20 units and the sole auction you participated in ended on 25, now suddenly the Buy it Now option seems not so favourable any more.

    2. Your other example when you trade away Fetches ( an interesting subject because I am also quite conservative when trading these away 🙂 ). I think we can use this example with the Dissonance created:

      We belief that these are safe to hold and destined for a price increase. On top of that they are very liquid.

      So what do we do? We are very conservative, reluctant to trade them away.

      We have created a harmony/consonance in our consistency.

      Now suddenly we get a great deal on something we belief are safe to hold, will increase in price and are quite reluctant to trade away.

      We can rationalize this by telling ourselves that we have made a good trade on this one (external factor) so we try to eliminate the dissonance and feeling regretful about the trade.

      We can also alter our belief of ”I do not like to trade away my Zendikar fetches because they are safe to hold, destined for a price increase” to something like ”I am willing to trade away my Zendikar fetches if I can make a direct 50% in profit by trading or else I will hold the Zendikar fetch because they are safe to hold and destined for a price increase”.

      This way you prevent yourself from becoming emotionally overwhelmed and protect your feelings from being agitated by making a good trade with cards you are reluctant to trade in the first place. That way you prevent yourself from immediately refilling your stock at a higher premium price.

      I hope it makes sense, thanks again for your comment :)!

      1. i have a couple of tricks to avoid regret while trading and at least diminish it in others.

        i don’t trade my collection. i trade an inventory. if i meet resistance i walk away. too much risk of someone walking away with a bad taste.

        if, during a FNM night, someone that’s traded with me thinks they can get a better deal or is voicing some regret i offer to retract the deal, taking my cards back and returning theirs. alternatively, if they feel they mispriced something but decide to keep the trade intact i insist on giving them value. because i try and know what my partners like this value ranges from bulk rares, playable uncommons or the occasional spec play.

        let them go with “i got so much” in the trade and not “he trades for profit” thought if they can’t maintain both and be happy.

        1. That’s a very interesting thing I omitted from my thoughts from the age of 7-9 where Pokemon cards were hot. We mostly traded amongst each other saying ”as soon as the trade is made, it is irreversible”. It stuck with me up till now

          I mean it is a good gesture to do it, no one expects it but as the same time it can also be perceived as a bit shady if you know what I mean. It sounds pessimistic but if people don’t expect something they are going to ask themselves ”now why did he actually wanted to revert the trade?”. We both know the real reason and probably will say it to our trading partner but if unanswered it can be perceived as a ”missed hit&run attempt”

          it’s pretty hard to get this thought on paper so I probably have to explain it in a different way but thanks for showing me the options you use :)!

    1. Hello Tim, thank you for mentioning that the article is not so clear. I hope with this comment to enlighten you.

      Cognitive Dissonance is the psychological conflict from holding two or more incompatible beliefs simultaneously.

      A well known example is that You know smoking is bad for your health. But you keep on smoking! It is very inconsistent behaviour because why would you keep on smoking when you know it is very bad for your health?

      Festinger ( http://goo.gl/OcC2l ; page 2 ) argues that the mind can rationalize this dissonance. As he puts it ”the smoker also feel (a) he enjoys smoking so much it is worth it; (b) the chances of his health suffering are not as serious as some would make out; ___ (d) perhaps even if he stopped smoking he would put on weight which is equally bad for his health. So, continuining to smoke is, after all, consistent with his ideas about smoking”

      To put it back in Magic Context; Let’s say you buy a card at StarCityGames at 20 units. Now upon receiving your order from StarCity, you noticed that on one of the smaller cardsites this same card is for sale for just 15 units. I am fairly certain we all are not happy to see that we could have bought this particular card for much cheaper. So the purchase we made at SCG went from satisfying to being dissatisfying.

      We bought (action) from SCG because at time they were the cheapest (knowledge/belief). Now since that is not the case, we feel bad about our decision. Now we can either email SCG for a full refund which is one form of reducing our Cognitive Dissonance in post-purchasing.

      Another alternative would be rationalizing that SCG actually provides better service to its customers when ordering than the other shop. So we rationalize that this 5 units we paid too much is justified because we get better customer service, faster delivery times etc.

      Since we as speculators serve both the ”Sell” & ”Buy” part, I found it interesting to write an article about this to minimize our losses and/or maximize our winnings by understanding this phenomenon in Psychology & Marketing. Especially in Sales , they are out there to get repeat sales from customers by ensuring their purchases were the right purchases and matches their needs.

      We can easily replace sales with trades and customers with trading partners and we instantly talk about trading cards with players in our community.

      I hope it makes sense, I am very willing to enlighten you more if anything is unclear please reply! Thanks

  2. I wholeheartedly agree with your decision to give your trading partner some form of “takebacksies”. A good supply of willing trade partners is worth much more than one trade in our favor. When I first got into trading and speculating which wasn’t that long ago, I really made some lopsided trades in my favor. I recall my trade of my one Sword of Feast and Famine for eight Innistrad dual lands which at the time I told my trade partner I was getting a little bit of value on the trade (his $50 to my $40). Not only was I getting value but I was unloading a card which had peaked. His reasoning may have been that no one ever traded away their swords. I regret such trades because I risk being labeled a shark which I kind of was at the time. These days I aim more for the even trade knowing that my trade partner is acquiring what’s hot now and I am acquiring the cards of the not too distant future. Happy trade partners and my reputation are absolutely my top priority.

  3. I’ve got a few questions.

    What was your last article about? (Adding a link to the previous article would be helpful.) Maybe I missed it, but in the end, what did you do with your fellow EDH player who felt like they got a bad deal? Are you suggesting that avoiding cognitive dissonance in trading relationships is a good thing? Overall it feels like this article needs a clearer focus.

    1. Hey Matthew, my last article was about ”Thankfullness” which you can find here: https://www.quietspeculation.com/2012/10/insider-t… . The next time I will provide URLs in my article when referring to other online sources

      To be quite frank the issue with the EDH player is still going on. We meet on a weekly basis so I probably will encounter him tonight. I think I will bring up the topic again and go from there. I probably will bring some boosters as well as he can use that for our local Cube draft entry fee.

      From a Marketing Point of View; we should mostly avoid cognitive dissonance when trading, selling. The amount of trades we can make is limited by the amount of Magic the Gathering players around. Therefore it is inevitable one has a lot of trades with a specific person (repeat trades/sales) so focusing on the long-term and keep in touch with your partners is quintessential.

      I see most sellers going for the short-term; quickly processed with no personalization. When something goes wrong, they lag in response & can be acting as if it is not their fault.

  4. To truly unlock the shark, one must master the mind. This article is great.. I think that there are several commonly labeled psychological points that need to be overcome to be a good trader.

    Cognitive Dissonance is the exact reason I took 5-6 weeks off before getting back to the game after my collection was stolen. I didn’t want to be emotional.

    Emotional Control is they corner stone of a great floor trader.

  5. Wonderful article and fascinating read.

    I think your point at looking long term vision instead of short term gain is great. You touched on it that you spend money in ensuring you maintain your integrity will eventually see you come up on top. Too often we get distracted by valuing just what is in front of us rather than considering the bigger picture.

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