Sunday, May 20, 2012

Cognitive Bias: "appeal to authority" fallacy

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Who are real experts in Multi-level marketing?
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A common sales technique is to cite some experts. The question is... are they really experts in what they say they are in?

MLMers often cite so-called leaders, who had been in the industry for a decade or two, and have mastered many sales techniques. They got a bit of name recognition, so when they endorse a particular opportunity or product, people think that product / opportunity must be good, instead of looking at the actual merits of the product/opportunity itself. This is sometimes called "name-dropping", but the real name is "appeal to authority" or "argument from authority". It is best demonstrated as follows.
A: X is true
B: Why?
A: Because Y said so. 
Y could be anybody... your brother, the church leader, expert witness, your parents, your teacher... your upline, etc. etc. It's someone who you consider to be important enough to be an "authority".

Not all name-dropping are fallacies. There are two major factors to determine whether it's an "appeal to authority". For example,  if Y said "X is true"
  1. Is Y an expert on the subject related to X? 
  2. Do most of the experts in the subject related to X agree with Y?
If both 1) and 2) are true, then this is appropriate name dropping. However, this is rather rare. Usually, either the expert is NOT in the appropriate field, or the expert is a lone-wolf NOT commonly accepted in his field. 

For example, if one such MLM leader endorses a particular opportunity, and instead of explaining why this opportunity is great because of X, Y, and Z, he merely said "Trust me, I know what I am talking about, as I have 20 years of experience in MLMs. This one is the best I've seen."  he is guilty of appealing to authority... himself. Furthermore, he also committed the "anecdotal fallacy" where he cited his own anecdotal experience instead of the relevant variables and logic. 

Here is a rhetorical question: what determines a MLMer's success in a MLM? 

The answer is sales. You must know how to sell. You can call it direct selling, network marketing, MLM, whatever. The idea is to sell. Therefore, someone who has long experience in the MLM field is probably a good salesman. If he claims that this opportunity is great because of his personal experience and evaluation, he has overstepped his own expertise in sales, and instead, is claiming to be an expert in EVALUATING business opportunities (where you go into concerns like ethics, law, viability, market, product and more) when he has no such expertise. 

It has been my personal experience that most of these so-called MLM leaders have NO recognition of their own limitations, esp. the ones that claim to evaluate various opportunities.

I will link you to one such "review", where the author, who claims "over 24 years in direct selling, diamond in multiple opportunities, appeared in nationally published books..."makes him an expert in evaluating new opportunities.

This is not a review of his review (you can read that here)  but rather, pointing out that in his review, he basically harped on "it makes money fast", then "it looks too good to be true but doesn't mean it's not", and "I smiled when they said a certain company is going to die and ten years later it's on NYSE". He failed to support his own opinions with evidence, and even his opinion is a weasel opinion. He failed to discuss the legal aspects, product aspects, market, and so on and so forth. In fact, half of the "review" is barely relevant personal anecdotes and sales pitch for his own lead generation system.

The fact that TVI Express was issued a cease-and-desist by state of Georgia in 2010 only proves that his analysis was faulty and worthless.

Unfortunately, he's not alone. With the advent of article farms, forums, article websites, and free website / blog anybody can published anything on the Internet, and there are STILL people claiming "TVI Express is a great opportunity" two years after it had been evicted from the US of A (and convicted as a scam around the world). Just search on and you'll find a ton, many of which fresh.

Just because someone claims to be an expert doesn't mean he is. Remember the joke, "I am not a doctor, but I play one on TV"? You don't want such a guy offering you medical advice, do you? What if he *thinks* he's a doctor? Would you trust such a person? No!

Same with MLM. Treat all such "expertise" with a bit of skepticism. All claims should be supported with evidence and logic, not unprovable personal anecdotes, bad analogies, and other logical fallacies.

NOTE: There is a variant of "appeal to authority" that I called "fake authority", where the "authority" was misrepresented.

Type 1) This "expert" sounds like an expert, but is not.

Example: A courthouse worker "proves" that this MLM is legal.

Problem: courthouse worker, unless s/he is a lawyer well-versed on Ponzi/Pyramid and commercial law, cannot certify a MLM as legal or not. A paralegal can offer some non-binding opinions, but that would require s/he presenting evidence to support the premise.

Type 2) This "expert" did NOT endorse the product/opportunity, but was misquoted / mis-represented to
appear as if he did.

Example: Bill Clinton thanked the Direct Selling Industry! He supports this MLM!

Problem: While Clinton did have a speech thanking the DSA, and specifically for helping out the poor with micro-loans, he did not endorse any specific company. Thus, claiming that "this company is MLM, Clinton thanked MLM, thus Clinton thanked us too" is a fallacy of division: what applied to the whole does NOT necessarily applied to individual parts of the whole.

Look through the "appeal to authority" fallacy when it is used on you. Ascertain this 'expert' is indeed an expert in the purported field.

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