Why do consumers eagerly queue for hours to acquire the latest iPhone, or why do certain luxury items command extensive waiting lists? According to Devina Mehra, Founder and CMD of First Global, these seemingly disparate behaviors, along with the urge to chase popular investment trends, stem from a powerful, shared human drive: the desire to belong to a 'tribe'.
The Tribal Instinct Explained
Mehra argues that the instinct to belong is deeply embedded in human psychology, tracing its origins back to early human evolution. In ancient times, survival was intrinsically linked to being part of a group; exclusion often meant severe consequences. This evolutionary wiring, Mehra suggests, continues to shape our actions today, even as the definition of a 'tribe' has transformed.
Today, a 'tribe' can manifest as a social circle, a professional network, or a desired aspirational lifestyle. Owning the newest iPhone, carrying a specific luxury handbag, or aligning with a particular brand can act as a signal, demonstrating an individual's affiliation with a chosen group. Mehra emphasizes that this explains why functionality alone often fails to account for certain consumer choices; the perceived social identification provided by an item often outweighs its practical utility.
From Consumer Trends to Investment FOMO
This tribal instinct extends beyond consumption into the realm of financial markets. Investors frequently experience a compulsion to follow the crowd when an asset, sector, or investment theme gains widespread popularity. The intense pressure to participate when 'everyone' appears to be profiting can lead to a powerful fear of missing out, commonly known as FOMO. This phenomenon is essentially the 'bandwagon effect' in action, where the discomfort of being outside the perceived successful group drives participation.
Understanding Hardwired Biases
Recognizing these inherent biases, Mehra notes, does not automatically eliminate their influence. She cites Nobel laureate Daniel Kahneman, who, despite a lifetime of studying cognitive biases, admitted his own decision-making remained largely unchanged. This suggests that these tendencies are not merely recent habits that can be unlearned, but rather deeply ingrained evolutionary shortcuts, honed over millennia to ensure survival and genetic propagation.
Evolution, as Mehra describes it, acts like a 'hacker,' optimizing for survival rather than perfect rationality. It relies on strategies that were 'good enough' to pass genes to the next generation. Consequently, modern humans are left with instincts designed for a vastly different world. The same impulse that once encouraged our ancestors to stay with their tribe now manifests in queues for new technology, the pursuit of luxury goods, or the rush to join a popular investment trend. Acknowledging this instinct is the first step, but escaping its profound influence remains a significant challenge.