Posts Tagged ‘behavioral economics’

Progress – A Little Often Leads to A Lot

Behavioral Economics

Ever notice that as a goal gets closer, you feel more motivated to cross the finish line? In behavioral economics, this is known as goal gradient theory, and one practical application of this theory is to take long-term goals and break them into a series of shorter-term goals. For example, take the long-term goal of…

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How You Say It Really Matters!

Behavioral Economics Framing

At Understood Connections, we are fascinated by language, and that’s a good thing because much of the research around how people analyze choices and make decisions focuses on how simple shifts in language can have a significant impact on the behaviors.  Behavioral Economics (BE) gives us a number of ways to use language to nudge…

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Reminders – Simple and Powerful

Behavioral Economics

It’s a question that has bugged economists and social scientists for generations – why so often do people fail to do things they have committed to doing?  Even in situations where the benefits of doing something are significant, or the consequences of not doing something are severe, compliance with deadlines, obligations or commitments is often…

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Behavioral Economics – Its Complicated

Behavioral Economics

At a recent workshop, we discussed a behavioral economics experiment that showed how stressing the positive or negative aspects of a situation altered the way participants responded to the risk inherent in the situation.  We demonstrated the famous test regarding treatment options that were framed to highlight either the number of patients who would die…

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Consumer Engagement – You Don’t Need a Diamond Ring

Behavioral Economics Credit Unions

Many of the executives we talk to are searching for ways to build stronger relationships with their customers. Their research tells them customers have become primarily value or price shoppers and at any point, a new, low price entrant could disrupt their market. These executives often focus on the solutions they’ve traditionally used, finding ways…

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Choice Architecture – Designing for Better Results

Behavioral Economics

‘Game-changing’ ‘Provocative’ ‘Useful’ This is the feedback we hear when introducing the concept of behavioral economics (BE) to strategic leaders around the US.  They realize their organizations don’t really understand how consumers analyze choices and make decisions. Our discussions then uncover missed opportunities, both with engagement and performance. The idea they can use BE to…

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Behavioral Economics And Friction – A Little Dab Will Do Ya.

Friction behavioral economics

As an executive at some of the world’s largest banks, I spent most of my career working aggressively to get friction out of the products we offered.  Our goal was to automate as much of the transaction initiation and approval steps as possible; to remove customer and bank intervention (and thinking) from the process.  Originally…

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Behavioral Economics Says People Are Easily Swayed – Want Proof?

Behavioral Economics Framing Credit Union

Imagine the following scenario.  You are head of a team responsible for rolling out a new training program to prepare 600 students for college. Your research indicates two possible programs, each with different predicted outcomes.        Program A – 200 students are accepted into college        Program B – ⅓ chance that all 600 will…

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Want to Change Behavior? Make it Simple.

Credit Union Changes Behavioral Economics

A credit union was frustrated.  A significant number of their members had little to no savings.  To help, the CU provided financial literacy training. The class was well attended, and at the end, participants agreed they needed to save more and most were able to identify at least three things they could do immediately to…

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What is Behavioral Economics & Why You Need to Know About It

Behavioral Economics

Simply put, behavioral economics (BE) looks at why we do or don’t do something, choose or don’t choose something, decide or don’t decide at all.  It shows us how our thoughts and emotions may affect our decision-making, which means our choices may be irrational, much to the surprise of classic economists.   Classic economists says…

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