Friday, March 16, 2012

Behavioural Economics Twitter highlights (10 Mar-16 Mar 2012)

Behavioural and Behavioral Economics tweets 
Sat 10 Mar-Fri 16 Mar 2012


The summary is posted weekly by People Patterns.  
This post contains a summary of tweets noted in the past week that mentioned behavioural/behavioral economics. Where possible, re-tweets have and 
tweets without links been removed to condense the list.

By all the Tweets about daylight savings, I'm guessing it's just arrived in the States? Well done to Jodi Beggs for her piece "On Behavioral Economics, Loss Aversion, And My Hatred Of Daylight Savings Time…"

Tweets with Behavioural Economics (UK spelling)

Good article: Social versus individual debate in relation toBehavioural Economics  via 



The Browser's special report is on Behavioural Economics ~ there's some interesting stuff here  


Behavioural Economics confined to investors only? Watchdog to protect ‘irrational’ investors. Via FT 

Billionaire investor Warren Buffett and  "reframing" & gold


One for you : human behaviour - let's bringbehavioural economics into the mix 

Feelings Matter — Even in Investing Decisions. Behaviouraleconomics  KW

Why you might drive more sales by offering free delivery rather than % discount  Behavioural economics


behavioural heuristics and designing for behaviour change via   -economics

Game theory, neuroscience, behavioural economics, auction theory solving problems on the ground in India

The Economics Of Emotion  via  > neuromarketing andbehavioural analytics

The Punishment Swap - A tale of hyperbolic discounting.Behavioural economics | : via 

Why free delivery can beat a "percentage off" discount

What's Market Research's Response to Behavioural Economics?

Where behavioural economics goes wrong  via

From a first time poster: How behavioral economics changes consumer research - Welcome!

RT  Barclay's Diamond gets £18m despite 'unacceptable year'  absurd behavioural financialeconomics gone awry

Tweets with Behavioral Economics (US spelling)
Or 'old/new' behavioural economics MT@TimHarford: RT behavioraleconomics: Simon v Kahneman...

.: Can behavioral economics help improve diet quality for nutrition assistance program recipients?

Behavioral Economics? What's That? saT: .Ttj 

Michael Lewis writes about Daniel Kahneman or what behavioraleconomics has to do with baseball

Decision Sciences and Behavioral Economics | Official Mu Sigma Blog 

Kevin Volpp on "Behavioral Economics and Automated Hovering".
The Economics Of Emotion.Neuromarketing + Social Data +Behavioral analytics = Connection intelligence
RT : A  developer discussesbehavioral economics: Spending Real Money In A Virtual World

"recent discoveries in behavioral economics and psychology demonstrate that consumers seldom behave rationally"

Behavioral Economics -- What I would have done that doctorate in

Using a behavioral economics approach to get people to take their medication with dramatic results

People Patterns: Why free delivery can beat % off discount | via  

Great blog title: Economists do it with models 

1



interesting behavioral economics experiment: poverty as a psychological trap 

Supremely interesting video on behavioral economics and the 2008 market crash:  "Mind Over Money" NOVA on PBS

Behavioral Economics and Its Applications 8211 Peter Diamond Hannu Vartiainen download, read, buy online 
Good article comparing behavioral economics authors RT What to read on behavioural econ instead of Kahneman 

Happiness: it's not in the jeans via   Diesmal gibt es einiges zuBehavioral Economics

Behavioral Economics  via 
Monozygotic twins or unrelated stepchildren? On the relationship between economic psychology and behavioral economics

Rory Sutherland talks to Michael Leander about marketing andbehavioral economics here 

Tuesday, March 13, 2012

Why free delivery can beat % off discount

Walking past a bedding retailer the other day and the sign on the pathway caught my attention as a nice little example of applied Behavioural Economics.  "Today only.  Free delivery".  Delivery costs around $40, so offering it as a free service is the equivalent of around a 10% discount on  a queen size mattress retailing for $400, but they chose to advertise the free service rather than reduced price.  Why?  Because 'free!' is much more behaviourally persuasive than a mere discount.

The online behemoth Amazon was one of the first to use this technique online.  Amazon offer free shipping for books over a certain value ($25), and what they find is people prefer to spend more to qualify for the free shipping than pay for the service.  In other words, people buy two books and spend more than $25 just to avoid paying a few dollars for shipping.

The behaviour behind this is loss aversion. We hate to lose and paying for a service like postage from which you gain little, is simply painful to our psyche.

Whilst the Amazon model is great for customers in the US, not so for us internationals!

Enter The Book Depository UK that offers free shipping anywhere in the world for any book.  Whilst the list price for the item is usually higher than Amazon, shipping is free.  By way of example, "Disrupt! Think the Unthinkable to Spark Transformation in Your Business" by Luke Williams is available on Amazon for $16.79 plus $9.81 shipping so the total is $26.31.  On The Book Depository the book is $24.74 inclusive of shipping.

The Book Depository has hooked into a key behavioural element here; we don't like to feel that we are paying for services related to the product.  Whilst I know that the higher listed price must cover the cost of shipping, to me the value of the purchase is in the book - the thing I am seeking to buy.  I feel better paying more for the item than I do for services that really have nothing to do with the product itself.  I will retain the book, I don't retain the delivery service.

And this is the genius of the free mattress delivery. I keep the mattress, I don't keep the delivery. Discount the element of your offer in which I see no ongoing benefit and I'll be a happy shopper.  So when you are next seeking to attract buyers to your shop, consider which elements of the product you are best to discount.  Scrapping annoying services costs might be a great place to start.


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