salience

The Behavioral Economics of Price-Setting
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The Behavioral Economics of Price-Setting

Business & Management, Marketing & Consumer Behavior

The Behavioral Economics of Price-Setting

Prospect theory proposes that when making decisions people use a reference point to frame prospective alternative outcomes as either potential gains or losses; when considering prospective gains, they are risk-averse and prefer certainty, but when considering prospective losses, they are risk-prone and prefer to risk the possibility of larger but uncertain losses. However, when setting prices people make decisions that contradict prospect theory: they are risk prone when cutting prices with the prospect of revenue gains, and risk averse when raising prices that they associate with perceived revenue losses.

By Gerald Smith|2022-02-17T05:21:38+00:00December 7th, 2021|Categories: Business & Management, Marketing & Consumer Behavior|Tags: availability heuristic, bias, framing, loss aversion, management, marketing, pricing, prospect theory, salience|

Tell Me Why! Explanations for Ambiguity in Health Decision Making Affect Treatment Choice
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Tell Me Why! Explanations for Ambiguity in Health Decision Making Affect Treatment Choice

Behavioral Theory & Insights, Health & Medicine

Tell Me Why! Explanations for Ambiguity in Health Decision Making Affect Treatment Choice

Medical treatment decisions are often rife with ambiguity. Exact probabilities for things like side effects or treatment success rates are frequently unknown. But why is this important? Because decision making research has shown that ambiguity can systematically alter the choices people make. We investigated how providing different explanations for the ambiguity in a treatment decision context affected willingness to adopt a treatment with an ambiguously described success rate. When the explanations involved elements that the person was knowledgeable about or could control, people were more interested in an ambiguous treatment.

By Jillian O’Rourke Stuart|2022-05-26T06:59:13+00:00August 30th, 2021|Categories: Behavioral Theory & Insights, Health & Medicine|Tags: ambiguity aversion, communication, decision making, framing, personal health, public health, salience, treatment choice|

The Budgeting App Trap: When Spending Information Backfires
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The Budgeting App Trap: When Spending Information Backfires

Finance & Investing, Technology & Digital

The Budgeting App Trap: When Spending Information Backfires

Do budgeting apps always improve consumers' financial decisions? Contrary to common beliefs, the use of budget apps can increase spending, especially at the end of the budget period. The authors of this article propose five interventions to mitigate the acceleration of spending and help FinTech apps better serve consumers' financial needs.

By Think Forward Initiative|2022-02-17T05:29:58+00:00March 10th, 2021|Categories: Finance & Investing, Technology & Digital|Tags: behavioral finance, communication, financial planning, mental accounting, nudge, personal finance, RCT, salience, saving, spending|

Three Behavioral Insights into the Aging Mind
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Three Behavioral Insights into the Aging Mind

Behavioral Theory & Insights, Society & Everyday Life

Three Behavioral Insights into the Aging Mind

Behavioural science has contributed much to the understanding of decision-making in the last few decades. We now understand how heuristics and biases can influence our thinking, perceptions, choices and behaviour. Yet, many of the frequently cited studies from behavioural science have been conducted on students, typically in their early twenties. Consequently, people often ask whether these findings still hold in other generations: Does our decision making process differ as we get older? Do we become more or less ‘rational’? And if minds do differ, how does the 20 year old mind differ to the 70 or 80 year old mind?

By Crawford Hollingworth & Liz Barker|2022-02-17T07:03:13+00:00November 27th, 2015|Categories: Behavioral Theory & Insights, Society & Everyday Life|Tags: affect, ageing, aging, bias, choice, choice deferral, choice overload, decision making, emotion, framing, heuristic, overchoice, retirement, salience, system 1 & system 2|

The Battle for Consumers Is Often about Beliefs, Not Consumer Experience
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The Battle for Consumers Is Often about Beliefs, Not Consumer Experience

Marketing & Consumer Behavior

The Battle for Consumers Is Often about Beliefs, Not Consumer Experience

Marketers increasingly mold their work around the customer experience. They manufacture rich, immersive interactions, carefully crafted to resonate with consumers. A 1998 Harvard Business Review article on the ‘experience economy’ noted that “experiences are a distinct economic offering.” Quite simply, the argument runs that delightful customer experiences add value and build loyalty. And yet many companies find that objective improvements to products and services, which are central to experience, don’t translate into customers or revenue. The fact is, renovating experience is insufficient, because how we perceive an experience depends deeply on our beliefs and intuitions.

By Ravi Dhar|2022-02-17T07:06:23+00:00September 25th, 2015|Categories: Marketing & Consumer Behavior|Tags: beliefs, communication, consumer behavior, consumer psychology, dual-system theory, framing, marketing, perception, persuasion, priming, salience, social influence, system 1 & system 2, trust|