Though in a short relatively to the rest of the sciences career, Behavioral Economics has managed to win significant recognition, with Nobel prizes and great experiments that provide intel for the actual human decision making process, understands the patterns of human irrationality and explains everything that business, brands and the rest of the sciences could not.
What is Behavioral Economics?
Studying the effects of psychological, social, cognitive, and emotional factors on the economic decisions. And applying such insights in order to understand and influence decisions/behavior in the economy and their consequences.
What is offered by Behavioral Economics?
Behavioral Economics apply on most if not all aspects of everyday life and can be if understood applied to everyone’s work routines making their end goals more achievable with lower frictions and higher returns.
Such intel can also be utilized in consumer behavior, getting the commerse sector on their feet with the amazing case studies that exist.
Every company is looking for ways to reduce their cost-and-time-spent-versus-profit ratio. In order to achieve this, they need insights, and use market research and data analysis as their main tools.
Companies should realize ‘big data’ isn’t as useful as they were told, and that smaller, precise data sets answer questions quicker and cheaper.
A Behavioral Economist is useful in all the above areas.
How can one influence human behavior?
Behavioral economists can put into effect their analysis and intel towards changing a specific human behavior with a technique calle “nudge”.
“A nudge […] is any aspect of the choice architecture that alters people’s behavior in a predictable way, without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”
Behavioral Economics helps us predict customer behavior and gives us the tools to influence it and change it.