Behavioral science and decision making

As I am reading Kahneman’s latest book, “Thinking Fast and Slow” (which is brilliant), I have come across a few articles on decision making and behavioral science in which I believe you (my readers and clients) will have an interest.

The first is about how the British Government is using behavioral economics to influence policy. David Cameron established a new branch of the government with the “Behavioral Insights Team”. They give input into areas as diverse as the wording used in tax collection letters and in encouraging homeowners to install better insulation in their roofs. The New York Times article can be found at:
Behavioral Science Can Help Shape Public Policy

The second is about how consumers often get sidetracked from rationality when making their purchase decisions. The article lists 11 common errors including:

  • Letting our emotions getting the better of us;
  • the impact of alcohol and time
  • how we are obsessed by the number 9.

Its a one page article in The Atlantic and can be found at:
The 11 ways Consumers are Hopeless at Maths

The third from Scientific American considers how knowing a foreign language can improve your decision making. It basically demonstrates that when we are thinking in a foreign language we tend to be more rational and logical; and are less likely to be tripped up by some of the heuristics that may catch us out when thinking in our own language.

The article quotes Daniel Kahneman and other social scientists in the examples given. The article appears on the Scientific American website:
Knowing a Foreign Language can Improve Your Decisions.

All three articles use experiments to make their points. However, the opportunities to use these findings outside of the laboratory are important. Whether it be in the decision making within our own organisation or in trying to persuade others to act in a certain way. Genesis, in our work with our clients and their decision making issues, bring some of this behavioral science to bear; as well as offer it as part of our decision training courses.. Please contact us if you would like to discuss this with us at sgifford@genesis-esp.com

 

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2 Responses to Behavioral science and decision making

  1. Guy Higgins says:

    Behavioral science has enormous potential for benefitting humanity. As with everything, there is a downside — I’ll assert (just for the purpose of generating discussion) that the UK’s focus on wording to encourage people to insulate their roofs is on the edge of applying behavioral science for the purpose of “controlling the masses.” That is the downside.

    The upside is using behavioral science to understand how people actually behave (rather than how we want them to behave or believe they behave) and the use of that knowledge to craft policies, plans and programs that will be more effective because they are compatible with the way we, predictably irrational (tip o’ the hat the Dan Ariely) humans, behave.

    A salient and perhaps classic example of how people actually behave is the highly discussed flight of some very rich people from the US to Europe to avoid the high taxes that they hear the president proposing every day. I’m not claiming to agree with the president, with the fleeing rich or with the political opposition — simply observing that such may be the case. The president certainly didn’t want people to leave the US, but that is happening.

    Behavioral science can help us better anticipate those nasty unintended consequences and avoid them or at least mitigate them. Think about it – better decisions, better laws, better policies, better programs, better plans.

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