Do top ten lists influence your buying decisions?

That means we may pay more for — and we’re much more likely to even consider — an item that is in the top ten, even though it may be basically the same as product number 11.

That means we may pay more for — and we’re much more likely to even consider — an item that is in the top ten, even though it may be basically the same as product number 11.

As an author, I know how important top-ten lists are. But you don’t have to be a writer to understand the relevance of these rankings — in fact, as a consumer, they’re just as important. If you’ve ever shopped on Amazon, you know that the website will tell you how any given product is ranked in a category, so you can be sure you’re buying the #1 toothpaste or the #1 toilet-paper product. Other websites take a similar approach.

A new study published in the Journal of Consumer Research explores these ranked lists, which we use not just for shopping but for picking out colleges, cars, investments and even restaurants. And what they found is that the rankings may cause us to pay more or make decisions that are actually not as well-informed as we’d like, says Mathew Isaac, an assistant professor of marketing at Seattle University.

“We like information that is nicely organized for us — we might want a list of the top mutual funds, or highest performing stocks. But even when there is no grouping made — you might just see a big list of the top 30 mutual funds — what people do is convert the rankings to evaluations to help them make judgments. And when you go from number 11 to number 10, people think the quality of the product drops significantly,” explains Isaac.

That means we may pay more for — and we’re much more likely to even consider — an item that is in the top ten, even though it may be basically the same as product number 11.

Other methods of categorization cause us similar issues when making decisions, says Isaac. In a different paper, also published in the Journal of Consumer Research, Isaac and his fellow researchers found that the way information is grouped can influence our buying decisions. This, too, might impact how we select an investment or — particularly relevant this time of year — which house we decide to purchase.

“Our research suggests that a prospective homebuyer who is considering making an offer on a particular home may be influenced by irrelevant category information that happens to be top-of-mind. If the home is part of a large category, listed by an agent among many other listings, homebuyers may perceive its likelihood of being the highest-appreciating property in a set to be higher than if it is classified into a small category, listed by an agent with only a few other listings,” explains Isaac. In other words, because you’re more likely to find your dream home in a list of eight rather than a list of two, you might disregard the homes in the group of two. “It’s true that if you pick randomly, you’re better off picking from the larger group. But you take that and misapply it to every member of that group — you might think houses in the large group are inherently better, and that’s faulty logic.”

There are two main things Isaac says we can do to stop these kinds of groupings from negatively impacting our decisions:

Understand the basis for the categorization. You have to figure out if the category is relevant. If you’re shopping for a home, and the homes are grouped by whether or not they have a basement, and you want a basement, it makes sense to ignore the homes in the category without one. They won’t meet your needs. “If it’s relevant, it’s fine to use the category to make your decision,” says Isaac. And if it’s not? It can be hard to ignore. “You might think you are, but when you’re looking at things listed on a piece of paper, you might have to take steps to re-present the information in some way. So if you’re looking at ten houses and they’ve been grouped in a brochure, re-write the information to help yourself individuate them.”

Get past round numbers. You might be hesitant to even click through to the page that lists products 11 to 20 on a bestseller list. But dig a little deeper and you might find that one of those products is actually reviewed more highly, or more suited to your needs. After all, it’s safe to assume the results of those lists are at least somewhat skewed by what Isaac’s research found — we’re more likely to purchase from the top ten, so those items are more likely to stay in the top ten, whether or not they’re the best or most affordable. And when evaluating a large, important item on a top ten list, like a college or investment, it’s certainly worth it to spend some time looking over all of your options.

Jean Chatzky

About Jean Chatzky

Jean Chatzky, the financial editor for NBC’s TODAY show, is an award-winning personal finance journalist, AARP’s personal finance ambassador, and a contributing editor for Fortune magazine. Jean is a best-selling author; her eighth and most recent book is Money Rules: The Simple Path to Lifelong Security. She believes knowing how to manage our money is one of the most important life skills for people at every age and has made it her mission to help simplify money matters, increasing financial literacy both now and for the future. In April 2013 Jean launched Jean Chatzky's Money School , a series of college-style, interactive online personal finance courses that give men and women across the country the opportunity to learn from and interact directly with her. Jean lives with her family in Westchester County, New York.
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