Behavioral Economics: It’s your choice…or is it?

BehavioralEconomics4xHmmmm…

Strawberry or hazelnut gelato?

A new iPad or a refurbished iPad?

Soup or salad?

Leasing or buying a car?

Paying for your software month-to-month or once annually?

Let’s be honest, as market research professionals we are an inherently curious group. Desiring to learn why people make the decisions they make is one of the reasons many of us get into market research in the first place.  Asking the customer about their decision will be one way to get some answers, but that direct approach doesn’t always tease out the biases that customer has that feed into their decision-making process.

Enter Behavioral Economics, a method of analysis that dives deep into the rational and irrational influences that drive purchasing decisions, brand preferences and more by applying psychological insights into human behavior to explain economic decision-making.

If you work in the research field and haven’t had much exposure to Behavioral Economics, it’s time to get up to speed:

  • There’s the often cited “jam study” about choice courtesy of Sheena Iyengar and Mark Lepper.
    • Iyengar is a leading expert on the psychology of choice —check out her TED talk during your next coffee break.
  • There’s Dan Ariely, Behavioral Economics professor and author, who suggests that “If humans were comic book characters, we’d be more closely related to Homer Simpson than to Superman” because “cognitive biases often prevent people from making rational decisions, despite their best efforts.”
    • Ariely also has a fascinating TED talk about how we make decisions.

The above is just an amuse-bouche! To dig deeper into Behavior Economics, join us for our four-week power program: Behavioral Economics for Market Researchers. In this class we will discuss the latest developments in Behavior Economics and their application to market researchers. We will learn how to leverage concepts such as anchoring, framing and the power of default to help our clients gain new insights.

Class starts March 7th —make the smart choice (!) and register now!

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