The psychology of business school rankings

A cartoon showing an MBA’s obsession with ranking from books by the admissions consulting firm Menlo Coaching

For the past decade or so, I have been studying the psychology of lists. By lists, we do not mean “wish lists” or “to-do” lists, but rather third-party lists created and curated by experts and news organizations. Poets & Quants’ Ranking of the top 100 MBA programs and the top 50 undergraduate professors. Literally the list goes on and on!

Third-party lists — which can be defined as “a large number of related items or names written or printed in succession” — are very popular. It’s fair to say that you can usually find a list online for almost any topic. For example, the website toptenz.net offers lists that range from “weird drinks people actually consume on purpose” to “his 10 apocalypse survival plans for the ultra-rich.”

The popularity of lists is related to the value of condensing information into manageable, bite-sized chunks. People have trouble tracking or recalling information beyond a few bullet points. Psychologist George Miller famously wrote a paper in the 1950s entitled “The Magic Number 7, Plus or Minus 2” about the limits of our ability to process information. Given all the stimuli competing for our attention simultaneously in the modern world, it’s possible that our information processing capacity has declined even further since Miller’s time.

Why Not All Rank Changes Are the Same

Lists offer an elegant solution to the problem of information overload. A third party takes a large amount of information (e.g., all universities in the world) and interprets it into manageable, vetted, relevant, well-ranked subsets (e.g. top 10). In addition to attracting attention, being on respectable third-party lists has been shown to influence consumer decisions, such as applying to law school, visiting hospitals, and even selling products. It serves as a badge of honor for the reputation you have.

My own research delved into exactly how consumers interact with and react to ranked listings. Each item in the list is generally ordered from best to worst. Here we outline three key insights that emerged from this work.

1. Not all rank changes are the same.Indeed, in all business schools Poets & QuantsThe ranking of the top 100 MBA programs hopes to increase its rank year after year. But consumers perceive a single spot spike very differently, depending on whether it’s a change from 12 to 11, 11 to 10, or 10 to 9. Based on information (such as the top 100 MBA programs), naturally create mental thresholds or breakpoints at common “round” numbers such as 10, 25, and 50. , or Top 50, has a disproportionately and surprisingly powerful impact on assessment and selection.Using the Graduate Administration Admissions Council dataset, we found that a potential applicant’s interest in a particular her B school was , school US News & World Report Rank did not move to a new “number of rounds” tier (e.g. moving from 26 to 24), even when the latter actually changed more (e.g. moving from 24 to 21) .

2. Unusual claims on ranked lists are usually harmful. If your company ranks ninth on the coveted list of the 50 Best Places to Work, you may want to highlight the specific number “9” on your website and marketing materials. However, my research with Dr. Aaron Brough of Utah and Dr. Kent Grayson of Northwestern Kellogg has shown that companies are better off using more generic numbers. So it’s more sensible to say it’s in the “Top 10” rather than “Top 9” or “Number 9.” why? We found that consumers who encountered a generic ranked list claim viewed the accolade positively and didn’t think much about it. But knowing that a company is in the top 9 makes consumers think and speculate more (“Well, maybe it wasn’t in the top 5. prize”). No. 1 and he is not as good as No. 2”). Overall, this extra layer of information processing caused by atypical claims tends to make positive judgments. So even though the top 9 are numerically better than the top 10, the top 10 seem to have a more positive impact on consumers.

3. Numeric rank works well for small lists, while percentage rank works well for large lists. How the same information is assembled can make a big difference to consumers. For example, in a set of 50 products, a particular product might be the top 10 rated products or the top 20% of products. The information is actually identical, but my research with Dr. Julio Sevilla of the University of Georgia and Dr. Rajesh Bagchi of Virginia Tech shows that consumers do not treat these equivalent claims in the same way. I was. In our research, when the size of the list is relatively small (i.e. less than 100), numerical claims (i.e. top 10) tend to boost product ratings more than percentage claims (i.e. top 20%). It turns out that there is. On the other hand, we find that percentage claims tend to be more acceptable when the size of the list is relatively large (that is, above 100). For example, in a set of 200 products, being one of the top 20 highest rated products is less attractive than being one of the top 10% highest rated products, but these claims is the same. This effect occurs because consumers tend to rely too much on rank numbers and ignore the format in which they receive information. After all, 10 is usually better than 20 in the realm of lists. In a field experiment at a famous Seattle cheese shop, my co-authors and I found that award-winning cheeses generated more sales in a matter of weeks. Adjacent billboards show that between ~20% of cheeses and ~400 cheeses received awards from the American Cheese Society (out of over 2,000 participants) despite information parity. Something was shown. Format matters!

In summary, my list research suggests that given the potential for information distortion, list creators and marketers need to be smart when creating and disseminating claims for lists and ranked lists. More importantly, the millions of individuals who peruse and use third-party lists every day are highly cautious and unwittingly allow cognitive biases to influence their assessments and choices. We need to be aware of the potential for impact.

Mathew S. Isaac, Ph.D. is the Thomas F. Gleed Chair of Business Administration and Chairman of the Marketing Division at Seattle University’s Albers School of Business and Economics.