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…

Read More

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…

Read More

Its Important to KFCU. Will It Be Important to You as Well?

Credit Unions Behavioral Economics

We held our inaugural Understanding Behavioral Economics (BE) workshop for credit unions, in partnership with Callahan and Associates (read more here), a few months ago and one CU executive found it so valuable that he invited us to hold a workshop exclusively for his employees. Last week, we traveled to Mississippi and spent a day…

Read More

Use Tax Refunds to Reduce Debt

Tax Refund Debt Credit Union

The Federal Reserve reported household debt reached a new all-time high of $13.21 trillion in the first quarter of 2018.  Clearly, the economy is growing, lenders are lending and borrowers are finding the money they need.  But at what cost?   The rate of student loans, vehicle loans, and credit card loans is growing and…

Read More

Doing Great Things with Tax Refunds

A member came into our client’s financial center in tears.  Her 15 year-old car, which she used for commuting to her two jobs, had just broken down.  She needed $300 to pay for the repairs and she had a total of $120 in her accounts; payday was 8 days away.  Now what? I’m sure your…

Read More

Connected Credit Unions

Credit Unions Behavioral Economics

We just returned impressed from a 1 ½ day behavioral economics workshop co-sponsored by our friends at Callahan & Associates. We pulled together 18 leaders from credit unions large and small from across the United States to discuss effective ways to use the dynamic science of behavioral economics to enhance their connections with members and…

Read More

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…

Read More

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…

Read More

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…

Read More

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…

Read More