The Narrative Fallacy: When Good Stories Make Bad Decisions

Humans are the only species we know in the world that can create stories. And not surprisingly, we are biologically and psychologically conditioned to narrativise. It becomes a method of communication, facilitating people's empathy for the information delivered. Most importantly, it helps us memorise information more effectively. Nowadays, storytelling also plays a critical role in marketing and branding.

Nevertheless, storytelling can be dangerous and potentially hurt customers and businesses. And the primary factor is the narrative fallacy. The narrative fallacy is the cognitive bias that puts us in danger of ascribing meaning or cause to random events. Humans are evolutionarily conditioned by developing the left hemisphere of our brains to reduce the complexity of the world's information, and the most efficient way of simplifying that complexity is through storytelling. As a result, customers may buy in a marketing campaign with a story that does not make logical sense.

For example, we might be told that German cars are safer than Japanese cars because more Japanese cars have crashed and been squashed in car accidents. However, Japanese brands are far more common on the road than German brands. There are simply more Japanese cars to crash.

Sometimes, we don't even look for the details about how bad or good the condition of the cars is after the accidents. If we saw an accident involving one or more Japanese cars, we would create a story in our brain: of course, they are not safe. This phenomenon leads us to another informal fallacy: the causal fallacy. It occurs when an argument incorrectly concludes that a cause is related to an effect. Think of the causal fallacy as a parent category for other fallacies about unproven causes.

One example is the false cause fallacy, which is when you conclude what the cause was without enough evidence to do so. Another is the post hoc fallacy, which is when you mistake something for the cause because it came first, not because it caused the effect.

I never intend to disgrace storytelling. On the contrary, I think storytelling is an art of persuasion and communication. I believe that storytelling is also the antidote to the pitfalls it creates, and the responsibility should fall on the shoulder of storytellers.

As marketers in the age of digitalisation and information, we should not only think about how much influence the story has on our customers but also the authenticity of the story. Otherwise, storytelling will be a weapon of manipulation rather than a tool of communication and information exchange. Moreover, businesses should also include the authenticity of their marketing content as a critical criterion for business ethics.