As behavioural economics has become more embedded in the world of research, so too have the questions that are asked of it. It no longer remains in the domain of behaviour change projects in the public sector and financial services, and there is certainly little of the discussion around its relevance to us as market research practitioners that was around even 18 months ago.
There’s lots of talk of BE as a methodology or spawning new methodologies - auto-ethnography, contextual research, System One ad testing, the blink test, and so on. But I’d propose that it’s about a holistic approach, a way of thinking that transcends every project and every aspect of a project regardless of sector or even of brief. BE has come of age, it needs to be thought of as a model of thinking rather than a series of methods and tools.
Daniel Kahneman said of BE, that ‘humans are to thinking as cats are to swimming’. In other words, we can do it if we really have to … but mostly we don’t. It is simply too effortful to do it all the time. And this is a generic issue, not one that is confined to certain types of brief.
One of the ways that we know when something has real power and relevance is to look at how it manifests in our everyday language. This is certainly the case in BE, and what’s more, being more conscious of our own language will help us spot biases at play in our own lives, giving us valuable clues as to how to take them into account in a research and marketing context.
So, let’s take a closer look at the types of language we tend to bump into on a daily basis, and what they really mean.
A new documentary explores how and why humans cheat, lie and steal.
All of our pants are almost constantly on metaphorical fire, is the basic impression I got after watching the new documentary Dishonesty: The Truth About Lies. The film is a fascinating exploration of the current scientific research on the little things that nudge people into lying, cheating, and stealing, and most of the research comes from behavioral economist Dan Ariely, the Duke professor and best-selling author of books like Predictably Irrational: The Hidden Forces That Shape Our Decisions.
The film will be screening for a short time in New York at the IFC Center, starting this Friday. (For bonus social-science nerd fun, Ariely and director Yael Melamde will be at the Friday and Saturday shows to answer audience questions.) But Science of Us got an advance screener of the film, so, herewith, some of the most interesting findings on dishonesty the documentary covers. (All direct quotes in the post are taken from the film. Honest.)
Thanksgiving is a reminder that thankfulness is a key to business health.
"All the days of the afflicted are bad, but one with a grateful heart has a continual feast." Proverbs 15:15
November is the month of Thanksgiving and the day itself comes around next week. As an entrepreneur and as a human being it is my favorite holiday of the year--by far. It is, of course, a refreshing pause from daily business tsuris, as well as the only holiday devoted to pure gratitude for... everything -- all our abundance and our very existence.
But it is also a reminder that thankfulness is a key to business health.
I've always believed it is the simple things that make for success in business. Not the brilliant, not the celebrated, not the strategically complex. One of those simple things is the act of saying "Thank you." Thank you. Thank you. Thank you. I always take time to say it, to mean it, to write it, to email it, even to tweet it (much as I hate the patent superficiality of that particular social medium. WTF.) As Texas journalist and poetWilliam Arthur Ward put it, "Gratitude can transform common days into thanksgivings, turn routine jobs into joy, and change ordinary opportunities into blessings."
The 17th ACM Conference on Economics and Computation will take place July 24-28, 2016 in Maastricht, The Netherlands.
The 17th ACM Conference on Economics and Computation will take place July 24-28, 2016 in Maastricht, The Netherlands.
Since 1999 the ACM Special Interest Group on Electronic Commerce (SIGecom) has sponsored the leading scientific conference on advances in theory, systems, and applications at the interface of economics and computation, including applications to electronic commerce.
The Seventeenth ACM Conference on Economics and Computation (EC’16) will feature invited speakers, paper presentations, workshops, tutorials, and poster sessions. EC’16 will be co-located with the 5th World Congress of the Game Theory Society (GAMES 2016), http://www.games2016.nl/, in Maastricht, The Netherlands.
The conference will be held from Sunday, July 24, 2016 through Thursday, July 28, 2016 in Maastricht, The Netherlands. Accepted technical papers will be presented from July 26 through July 28; tutorials and workshops will be held on July 24 and July 25. Accepted papers will be available in the form in which they are published in the ACM Digital Library prior to the conference. AUTHORS TAKE NOTE: The official publication date is the date the proceedings are made available in the ACM Digital Library. This date may be up to two weeks prior to the first day of the conference. The official publication date affects the deadline for any patent filings related to published work.
The focus of the conference is research at the interface of economics and computation related to (but not limited to) the following three non-exclusive focus areas: Theory and Foundations; Artificial Intelligence and Applied Game Theory; Experimental, Empirical, and Applications
Behavioral Science Explains the Failure of Free Markets
Most of you know me as a behavioral science guy, but I have to make a confession: my initial training is in Economics and business administration. Being born in a country with a communist dictatorship, with a centralized economy and spending much of childhood and teenage years in a chaotic backwards transition to market economy, I firmly believed in the virtues for free markets.
Perhaps because of this experience and seeing what free markets can do in a society unaccustomed to how they work, made me think hard if free markets are as virtuous as I thought them to be. And the answer is ambivalent: on the one hand, yes! It is absolutely obvious that a free market economy is far better than a centralized and corrupt one. On the other hand, however, free markets can be extremely perverse and lead to severely sub-optimal results (equilibrium).
Social media are used as main discussion channels by millions of individuals every day. The content individuals produce in daily social-media-based micro-communications, and the emotions therein expressed, may impact the emotional states of others. A recent experiment performed on Facebook hypothesized that emotions spread online, even in absence of non-verbal cues typical of in-person interactions, and that individuals are more likely to adopt positive or negative emotions if these are over-expressed in their social network. Experiments of this type, however, raise ethical concerns, as they require massive-scale content manipulation with unknown consequences for the individuals therein involved. Here, we study the dynamics of emotional contagion using a random sample of Twitter users, whose activity (and the stimuli they were exposed to) was observed during a week of September 2014. Rather than manipulating content, we devise a null model that discounts some confounding factors (including the effect of emotional contagion). We measure the emotional valence of content the users are exposed to before posting their own tweets. We determine that on average a negative post follows an over-exposure to 4.34% more negative content than baseline, while positive posts occur after an average over-exposure to 4.50% more positive contents. We highlight the presence of a linear relationship between the average emotional valence of the stimuli users are exposed to, and that of the responses they produce. We also identify two different classes of individuals: highly and scarcely susceptible to emotional contagion. Highly susceptible users are significantly less inclined to adopt negative emotions than the scarcely susceptible ones, but equally likely to adopt positive emotions. In general, the likelihood of adopting positive emotions is much greater than that of negative emotions.
The western liberal tradition is closely connected with the idea of rights and the rule of law. Rule of law is the idea of a civil society governed by a Constitution which sets limits to government power and protects individual rights against any
Nudges, small design changes that can markedly affect individual behavior, have been catching on. These techniques rely on insights from behavioral science, and when used ethically, they can be very helpful. But we need to be sure that they aren’t being employed to sway people to make bad decisions that they will later regret.
Why do we like the music we do? Research has shown that musical preferences and personality are linked, yet little is known about other influences on preferences such as cognitive styles. To address this gap, we investigated how individual differences in musical preferences are explained by the empathizing-systemizing (E-S) theory. Study 1 examined the links between empathy and musical preferences across four samples. By reporting their preferential reactions to musical stimuli, samples 1 and 2 ( Ns = 2,178 and 891) indicated their preferences for music from 26 different genres, and samples 3 and 4 ( Ns = 747 and 320) indicated their preferences for music from only a single genre (rock or jazz). Results across samples showed that empathy levels are linked to preferences even within genres and account for significant proportions of variance in preferences over and above personality traits for various music-preference dimensions. Study 2 ( N = 353) replicated and extended these findings by investigating how musical preferences are differentiated by E-S cognitive styles (i.e., ‘brain types’). Those who are type E (bias towards empathizing) preferred music on the Mellow dimension (R&B/soul, adult contemporary, soft rock genres) compared to type S (bias towards systemizing) who preferred music on the Intense dimension (punk, heavy metal, and hard rock). Analyses of fine-grained psychological and sonic attributes in the music revealed that type E individuals preferred music that featured low arousal (gentle, warm, and sensual attributes), negative valence (depressing and sad), and emotional depth (poetic, relaxing, and thoughtful), while type S preferred music that featured high arousal (strong, tense, and thrilling), and aspects of positive valence (animated) and cerebral depth (complexity). The application of these findings for clinicians, interventions, and those on the autism spectrum (largely type S or extreme type S) are discussed.
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Brain imaging reveals how neural responses to different types of music really affect the emotion regulation of persons. The study proves that especially men who process negative feelings with music react negatively to aggressive and sad music.
Emotion regulation is an essential component to mental health. Poor emotion regulation is associated with psychiatric mood disorders such as depression. Clinical music therapists know the power music can have over emotions, and are able to use music to help their clients to better mood states and even to help relieve symptoms of psychiatric mood disorders like depression. But many people also listen to music on their own as a means of emotion regulation, and not much is known about how this kind of music listening affects mental health. Researchers at the Centre for Interdisciplinary Music Research at the University of Jyväskylä, Aalto University in Finland and Aarhus University in Denmark decided to investigate the relationship between mental health, music listening habits and neural responses to music emotions by looking at a combination of behavioural and neuroimaging data. The study was published in August in the journal Frontiers in Human Neuroscience.
“Some ways of coping with negative emotion, such as rumination, which means continually thinking over negative things, are linked to poor mental health. We wanted to learn whether there could be similar negative effects of some styles of music listening,” explains Emily Carlson, a music therapist and the main author of the study.
Scientific Data is a new open-access, online-only publication for descriptions of scientifically valuable datasets.
The study of socio-technical systems has been revolutionized by the unprecedented amount of digital records that are constantly being produced by human activities such as accessing Internet services, using mobile devices, and consuming energy and knowledge. In this paper, we describe the richest open multi-source dataset ever released on two geographical areas. The dataset is composed of telecommunications, weather, news, social networks and electricity data from the city of Milan and the Province of Trentino. The unique multi-source composition of the dataset makes it an ideal testbed for methodologies and approaches aimed at tackling a wide range of problems including energy consumption, mobility planning, tourist and migrant flows, urban structures and interactions, event detection, urban well-being and many others.
Mental health practitioners answer the eternal question.
Jeb Bush might have pledged to conduct his campaign “joyfully,” but it’s hard to see the modern-day presidential campaign—months on the road, relentless attacks, kowtowing to donors—as anything but joyless. And if you make it through all that, your prize is one of the most stressful jobs in the world. Why do they do it? To understand, Politico Magazine asked leading psychologists and psychiatrists to get inside the candidates’ heads and diagnose the urge to run. Is it narcissism? Masochism? Psychosis? Are presidential candidates just like the rest of us—or are they just out of their minds?
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‘Grandiose narcissism levels are higher in more recent than in earlier presidents’
Research going back as far as 1998 suggests that modern politicians are more narcissistic than people in other professions. But in fact, politicians—at least those in positions of high power—might also be more narcissistic than ever. In a 2013 study published in Psychological Science, we and several colleagues examined a trait called grandiose narcissism, which comprises immodesty, boastfulness and interpersonal dominance (a certain presidential candidate in a gold-plated tower in Manhattan comes to mind). For every president up to and including George W. Bush, we asked eminent biographers and experts to complete extensive personality ratings for the five years before each president took office. The ratings revealed an intriguing trend: Grandiose narcissism levels are higher in more recent presidents than in earlier ones. Despite some caveats to this result, we also found that levels of several other traits, such as those linked to interpersonal oddity, were not higher in more recent presidents. Ultimately, our findings raise the possibility that the mounting pressures on candidates to be telegenic and adept at self-presentation may be selecting for heightened self-centeredness.
Behavioral economics has potential to offer novel solutions to some of today's most pressing public health problems: How do we persuade people to eat healthy and lose weight? How can health professionals communicate health risks in a way that is heeded? How can food labeling be modified to inform healthy food choices?
Behavioral Economics and Public Health is the first book to apply the groundbreaking insights of behavioral economics to the persisting problems of health behaviors and behavior change. In addition to providing a primer on the behavioral economics principles that are most relevant to public health, this book offers details on how these principles can be employed to mitigating the world's greatest health threats, including obesity, smoking, risky sexual behavior, and excessive drinking. With contributions from an international team of scholars from psychology, economics, marketing, public health, and medicine, this book is a trailblazing new approach to the most difficult and important problems of our time.
A Course in Behavioral Economics 2e is an accessible and self-contained introduction to the field of behavioral economics. The author introduces students to the subject by comparing and contrasting its theories and models with those of mainstream economics. Full of examples, exercises and problems, this book emphasises the intuition behind the concepts and is suitable for students from a wide range of disciplines.
Priming with religious concepts is known to have a positive effect on prosocial behavior, however the effects of religious primes associated with outgroups remain unknown. To explore this, we conducted a field experiment in a multi-cultural,
I have been making a mistake for most of my life. See, I’m an economist, and one of the things that attracted me to economics is the notion of the “ideal economy.”
Of course, there are valid objections to the use of markets. There are people who cheat and commit fraud, and there are problems with information and market power and externalities. Sometime consumers make mistakes. In fact, some of those mistakes, as my friend and Duke colleague Dan Ariely is fond of telling me, raise questions about the very nature of our “model” of consumption.
In his book Predictably Irrational, Dan makes two main points. First, consumers are not “rational,” at least not in the sense economists assume. Consumers have trouble choosing among several alternatives; new product prices are arbitrary; and people are seduced by “free” stuff. Second, sellers and marketers know that consumers are predictably irrational, and they take advantage of that weakness by advertising, packaging, and carefully framed comparisons.
So what’s the mistake I’ve been making for most of my life? I’ve been trying to defend the perfection of markets. I’ve been sucked in to the notion that markets are “ideal”: “Markets aren’t so bad!” “Consumers are generally better off!” and so on. Friends, if you have been defending the perfection of markets you have been played for a sap. Stop it. The simple fact is that people can be hoodwinked. People. Human beings. The results of behavioral economists and psychologists such as Dan Ariely, Richard Thaler, and others are correct, and persuasive. But when someone uses those results to criticize markets – and stops there – they are not playing fair. Because the criticism of markets always has to be in reference to some other system: markets are bad, compared to what?
Consumer irrationality creates great opportunities for producers.
MOST people are aware of their faults and foibles, and understand they are shared by others. They may also understand how these foibles may have significant effects, such as the marshmallow test (kids who resist temptation achieve more later in life) or loss aversion (people sell their winning stocks but hang on to their losers).
These findings have made a bit of a dent in orthodox economics, hence the acceptance of "nudge" approaches which aim to influence consumer behaviour by framing their choices in particular ways. Auto-enrolment into pension schemes (requiring workers to opt out, rather than opt in) is the best example. In broad terms, however, I don't think behavioural insights have changed the way that people think about economics. A free market is one in which producers compete to sell goods to consumers on the basis of price, or quality. Competition works to the benefit of consumers, leading to innovation and the elimination of shoddy goods; a restaurant that serves disgusting food, or has terrible service, will soon go out of business.
However, while we can all think of markets that do work like that (smartphones, for example), we can also think of plenty that don't. In their new book, "Phishing for Phools: The Economics of Manipulation and Deception", Robert Shiller and George Akerlof look at markets where customers are enticed to buy imperfect goods or to make choices that are not good for their long-term welfare (smoking, for example). Our review of the bookwas rather lukewarm and it certainly has flaws; the evidence is very anecdotal, many of the examples seem familiar and the replacement of "f" with "ph" (as in phishing) gets tiresome.
Over-sharing has made us into "approval-seeking machines." Every thought needs to be broadcasted, and we've lost a sense of what should be kept private.
The internet and social media give us the ability to broadcast our thoughts and feelings to the world at a moment’s notice. While there are many advantages to this ability to instantly communicate and reach out to others, it also breeds an environment of over-sharing.
Today, everyone seems to have a “digital self.” Our status updates on platforms like Facebook, Twitter, Tumblr, and Pinterest reveal a bit about who we are to the public. And as we know from countless controversies regarding celebrities and politicians, our “digital self” is intertwined with our public image and reputation.
Social scientists sometimes refer to this phenomenon as “ambient awareness,” which is a peripheral social awareness that we pick up about a person depending on what they “like” and “share” on social media. I first heard about this concept in the book Smarter Than You Think: How Technology is Changing Our Minds for the Better.
As humans, our failings are epic. We eat too much, lie to ourselves, never exercise enough, and spend so much money we have nothing left for that vacation in Hawaii. But technology, Dan Ariely believes, might save us from ourselves.
Ariely, professor of psychology and behavioral economics at Duke University is an investor and chief behavioral economist at Qapital, a Swedish-startup geared toward making millennials save.He tells Quartz the reason we fail to save—or spend effectively:
The most difficult problem is our lack of desire to think about it. You go to the supermarket and you buy and buy and buy.
People always underestimate. Even the cashier underestimates. We don’t add up all our costs. We are supposed to think about it and think of all the things we want to spend on now vs. later. But the reality is, we live in the moment and we make decisions in a myopic way without thinking about the big picture. It’s really, really hard. So we don’t do it.
uch like its creator, Karl Weierstrass’ monster came from nowhere. After four years at university spent drinking and fencing, Weierstrass had left empty handed. He eventually took a teaching course and spent most of the 1850s as a schoolteacher in Braunsberg. He hated life in the small Prussian town, finding it a lonely existence. His only respites were the mathematical problems he worked on between classes. But he had nobody to talk to about mathematics, and no technical library to study in. Even his results failed to escape the confines of Braunsberg. Instead of publishing them in academic journals as a university researcher would, Weierstrass added them to articles in the school prospectus, baffling potential students with arcane equations.
Eventually Weierstrass submitted one of his papers to the respected Crelle’s Journal. While his previous articles had made barely a ripple, this one created a flood of interest. Weierstrass had found a new way to deal with a fiendish class of equations known as Abelian functions. The paper only contained an outline of his methods, but it was enough to convince mathematicians they were dealing with a unique talent. Within a year, the University of Königsberg had given Weierstrass an honorary doctorate, and soon afterward the University of Berlin offered him a professorship. Despite having gone through the intellectual equivalent of a rags to riches story, many of his old habits remained. He would rarely publish papers, preferring instead to share his work among students. It was not just the publication process he had little regard for: He was also not afraid to target mathematics’ sacred cows.
There is some evidence for a role of music training in boosting phonological awareness, word segmentation, working memory, as well as reading abilities in children with typical development. Poor performance in tasks requiring temporal processing, rhythm perception and sensorimotor synchronization seems to be a crucial factor underlying dyslexia in children. Interestingly, children with dyslexia show deficits in temporal processing, both in language and in music. Within this framework, we test the hypothesis that music training, by improving temporal processing and rhythm abilities, improves phonological awareness and reading skills in children with dyslexia. The study is a prospective, multicenter, open randomized controlled trial, consisting of test, rehabilitation and re-test (ID NCT02316873 ). After rehabilitation, the music group (N = 24) performed better than the control group (N = 22) in tasks assessing rhythmic abilities, phonological awareness and reading skills. This is the first randomized control trial testing the effect of music training in enhancing phonological and reading abilities in children with dyslexia. The findings show that music training can modify reading and phonological abilities even when these skills are severely impaired. Through the enhancement of temporal processing and rhythmic skills, music might become an important tool in both remediation and early intervention programs. Trial Registration ClinicalTrials.gov NCT02316873
By Luca Tummolini and Daniela Grieco in Experimental Economics and Trust. Three main motivations can explain compliance with social norms: fear of peer punishment, the desire for others' esteem and the desire to meet others' expectations. Three main motivations can explain compliance with social norms: fear of peerpunishment, the desire for others’ esteem and the desire to meet others’ expectations. Though all play a role, only the desire to meet others’ expectations can sustaincompliance when neither public nor private monitoring is possible. Theoretical modelshave shown that such desire can indeed sustain social norms, but empirical evidenceis lacking. Moreover it is unclear whether this desire ranges over others’ “empirical”or “normative” expectations. We propose a new experimental design to isolate thismotivation and to investigate what kind of expectations people are inclined to meet.Results indicate that, when nobody can assign either material or immaterial sanctions,the perceived legitimacy of others’ normative expectations can motivate a signiﬁcantnumber of people to comply with costly social norms.
A new book by Phil Tetlock and Dan Gardner on Super-Forecasting.
FROM THE PUBLISHER Everyone would benefit from seeing further into the future, whether buying stocks, crafting policy, launching a new product, or simply planning the week’s meals. Unfortunately, people tend to be terrible forecasters. As Wharton professor Philip Tetlock showed in a landmark 2005 study, even experts’ predictions are only slightly better than chance. However, an important and underreported conclusion of that study was that some experts do have real foresight, and Tetlock has spent the past decade trying to figure out why. What makes some people so good? And can this talent be taught?
In Superforecasting, Tetlock and coauthor Dan Gardner offer a masterwork on prediction, drawing on decades of research and the results of a massive, government-funded forecasting tournament. The Good Judgment Project involves tens of thousands of ordinary people—including a Brooklyn filmmaker, a retired pipe installer, and a former ballroom dancer—who set out to forecast global events. Some of the volunteers have turned out to be astonishingly good. They’ve beaten other benchmarks, competitors, and prediction markets. They’ve even beaten the collective judgment of intelligence analysts with access to classified information. They are “superforecasters.”
In this groundbreaking and accessible book, Tetlock and Gardner show us how we can learn from this elite group. Weaving together stories of forecasting successes (the raid on Osama bin Laden’s compound) and failures (the Bay of Pigs) and interviews with a range of high-level decision makers, from David Petraeus to Robert Rubin, they show that good forecasting doesn’t require powerful computers or arcane methods. It involves gathering evidence from a variety of sources, thinking probabilistically, working in teams, keeping score, and being willing to admit error and change course. Superforecasting offers the first demonstrably effective way to improve our ability to predict the future—whether in business, finance, politics, international affairs, or daily life—and is destined to become a modern classic.
When people try to spot a lie, they generally make a judgment on a number of factors, including body language, expression, and word choice. This may be a mistake. People are complicated creatures, and they send mixed messages. Picking just one criterion to indicate truthfulness improves the odds of ferreting out a lie—but only a little bit.
This was the case in a recent experiment, run by the University of Huddersfield, where people asked to participate in a fake travel documentary were instructed to lie. Fake production assistants told the participants that they were running low on time, and would appreciate it if, on camera, they talked about one or two places they had traveled to and added in a couple of places they hadn’t traveled to. Under these circumstances, an evaluator looking for signs of guilt would probably be thrown off by people who believed that, by lying, they were helping people out, not hurting them. Nervousness might be a lie, or it might just be a response to being on camera.
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