Good read: Why Behavioral Economics is Cool, and I’m Not

Found this piece by Adam Grant on Linkedin via @fanseel. He lists some more interesting research he found lately, what do they have in common:

  • People are more likely to buy jam when they’re presented with 6 flavors than 24.
  • After inspecting a house, real estate agents thought it was $14,000 more valuable when the seller listed it at $149,900 than $119,900.
  • When children play a fun game and then get rewarded for it, they lose interest in playing the game once the rewards are gone.
  • People conserve more energy when they see their neighbors’ consumption rates.
  • If you flip a coin six times, people think Heads-Heads-Heads-Tails-Tails-Tails is less likely than Heads-Tails-Tails-Heads-Heads-Tails, even though the two are equally likely.
  • Managers underestimate the intrinsic motivation of their employees.

They’ve all appeared in the media as research done by behavioral economists, when in fact they were done by psychologists.

Grant concludes:

This is a common mistake. As one Nobel Laureate in economics observes: “When it comes to policy making, applications of social or cognitive psychology are now routinely labeled behavioral economics.”

It happens to me regularly: I’m an organizational psychologist, but I get introduced at least once a week as a behavioral economist. The first time this happened before a speech, I attempted to set the record straight, telling the executive that all of my degrees were in psychology. His response: “Your work sounds cooler if I call you a behavioral economist.”

Read his piece with possible explanations and why we have to say goodbye to Freud.

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