(credit: Felice Candillo CC BY)

The (behavioural) thing with wine

On the deep and interesting relationship between wine and behavioural sciences

ast week, some people in a Manchester restaurant ordered a £260 (€290, $340) bottle of Pauillac, but nobody noticed that they were brought a different one. The diners enjoyed the wine regardless, and the mistake only came to light afterwards. So far, so unremarkable — were it not for the fact that the bottle the guests erroneously received was a Pomerol, the most expensive one on the list, priced at an eye-watering £4500 (€5000, $6000).

This made the story rather newsworthy, and it also led to a Twitter discussion among behavioural scientists. Would the diners retrospectively exceptionally enjoy the wine they received? Where is the actual utility that explains paying that kind of price for 70cl of quaffable liquid? (More on this later.)

The tale reminded me of the special relationship that appears to exist between wine and behavioural and cognitive science. One of the reasons for this is undoubtedly that wine is one of very few consumer products where the most expensive item costs hundreds of times more than the cheapest, despite looking and feeling very much the same. Unlike with other goods, there are very few clues as to the market value of a bottle inherent in the product itself. A glass of wine looks much like another one, and it takes a relatively sophisticated nose and palate to distinguish a Pomerol Le Pin 2001 from a Tesco Finest Montagne St Émilion.

But telling red wine from white wine — even blindfolded, that should be possible for even the least qualified drinker, shouldn’t it? Not quite, it seems. One of the most famous wine-related experiments is the (widely reported and indeed misreported) The Color of Odors study.

Turning white into red

In two sessions separated by a week, 54 students at the Faculty of Oenology (yes there is such a thing!) at Bordeaux University were given two glasses of wine to taste. In the first one, they received a glass of white and a glass of Red Bordeaux, and they were asked to choose, from a list of odour descriptors (honey, grapefruit, cedar etc, the kind of terms wine buffs use), those that they thought fitted each of the two wines best. They could also make up their own. For each descriptor they used, they had to indicate which of the two wines most intensely presented its characteristics.

Which of these is the real red wine? (photo: Marco Verch CC BY)

In the second session they once again received two glasses of wine plus the list of descriptors they had produced in the first session, listed alphabetically. They were then asked to indicate, for each descriptor, which of the two wines best corresponded with it. Only, this time they did not get a glass of red and one of white, but two glasses of the same white as the previous week, one of which was coloured red with an odourless dye.

The first time they had used mostly typical ‘light’ descriptors for the white wine (lychee, passion fruit, citrus etc), but now the same white wine dyed red generally got ‘dark’ descriptors more associated with red wine (pepper, spice, blackcurrant etc). Does this mean, as some reports of the study suggest, that wine tasting is bullshit, because even that experts cannot tell apart white from red? Not quite. Remember that the participants were wine science students, with an interest in wine, but probably not quite the ‘expert critics’ that the media reports refer to.

What the study suggests is that our approach to categorizing wine is in the first instance visual, not through the palate. If we see red wine, we intuitively reach for the red-wine labels. But it also illustrates how easily our experience of a glass of wine can be influenced by aspects that have nothing to do with the taste.

Like the price tag, for example. Research by INSEAD neuroscientist Liane Schmidt and colleagues explored how people’s subjective experience of wine varies with the perception of value. Three kinds of wine were used, all costing 12 euros (£11, $14) for a bottle. Participants were placed in an fMRI scanner, and in a succession of trials were shown a price cue (€3, €6 or €18) immediately before being presented with a wine sample to taste. The researchers confirmed earlier results, that higher prices induced greater subjective experienced pleasantness for identical wines, but were also able to link this to neurological activity in the brain.

While the findings do not suggest attaching a big price tag to the cheapest plonk will make us go ecstatic with delight, they hint at an explanation why people choose to drink more expensive wine. As long as the extra pleasure outweighs the extra cost, it is entirely rational to pay more for exactly the same wine.

There’s more to the wine than its taste

But the utility we derive from wine is not just the sensation of taste and smell. Many people (and I happily count myself among them) tend to purchase more expensive wine for special occasions: prosecco for an ordinary birthday, proper champagne for one ending in 0. We somehow seem to want to symbolically emphasize the occasion through a visible sacrifice. (If you doubt this, imagine the same party, but with bubbly served in bottles with no label instead of Veuve Cliquot or Piper Heidsieck. It wouldn’t quite have the same effect, would it?) Anthropologists might even compare it with the sacrificial rituals of our ancestors that often accompanied important moments in life.

We should of course not discount the plain signalling function that wine with an expensive price tag can perform. If you take a client or a new romantic interest out for a meal, you may well stretch your credit card a bit further, in order to signal how important your guest is to you. Drinking expensive wine is also more memorable, and memories deliver a special kind of cognitive utility. In a year’s time you might still experience some pleasure of the expensive wine you buy or drink today, whereas a glass of more ordinary provenance will be quickly forgotten.

Returning to the lucky diners in Manchester: they thought they were drinking £260 wine (10 times the price of the cheapest wine), so they must already have been excited about that. What if they had known they were actually consuming something that was 17 times dearer still? They would quite likely have enjoyed it even more — not least if they knew they were getting it at a fraction of the price. (As an aside, this adds a twist to the research by Schmidt, indicating an opportunity for further research: would the pleasure be enhanced further by giving a high price cue, alongside a lower price actually paid?)

But the diners were unaware, so they could not have had that experience — at least not at the time. There are other ways in which the post-hoc surprise can provide extra utility to them as yet, though. They could now just pretend they already suspected something was amiss. This is a form of self-serving (“I know my wines!”) hindsight bias — also known as the “I knew it all along”-phenomenon. They might even start to believe this narrative themselves, for there is evidence that our memory rewrites the past with current information. And of course, their ability to endlessly entertain friends and family with this unusual anecdote will add to the on-going utility.

How to make a £300 Australian Shiraz look cheap (source)

Does this help us in selecting the optimum wine from a wine list — the one that is guaranteed to give you the most enjoyment for the buck? Unfortunately not. But restaurant owners may well take advantage of two cognitive biases. The anchoring bias describes how we tend to evaluate prices (or other numbers) in comparison to other numbers. A £260 bottle feels much more affordable if the most expensive wine on the list is £4,500, than if it is itself the dearest. It doesn’t matter if hardly anyone ever buys the highest-priced wine, as long as it gets more people buying the £260 one.

The second one is extremeness aversion, the propensity to avoid extreme options in choice situations. This is found to be a significant and robust effect which, when wine lists are concerned, describes how people will ignore the cheapest and the most expensive wines. As many diners are cheapskates who know little about wine, they would go for the second-cheapest wine (just think of the signal opting for the cheapest would send). A restaurateur with a modicum of insight in game theory will therefore make sure that the second cheapest wine is the one with the highest mark-up. Ker-ching!

Dan Ariely does give some clever advice about how to order wine in a restaurant, though: “inform the waiter that you have allocated a total of $50 for the tip and wine combined-so the more you spend on wine, the less you will leave for a tip. Now let’s see what they recommend.”

I’ll drink to that — a glass of the third-cheapest wine, naturally!

Originally published at http://koenfucius.wordpress.com on May 24, 2019.

Thanks for reading this post — I hope you enjoyed it. Please do share it far and wide — there are handy Twitter and Facebook buttons nearby, and you can click here for a LinkedIn link, or simply copy and paste this link. See all my other posts (I publish one every week) here. Thank you!

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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