Design a better, irrational world
Dan Ariely, a professor of behavioral economics at Duke University and author of Predictably Irrational, presents examples of cognitive illusions that help illustrate why humans make predictably irrational decisions.
This video is a talk he gave at the Entertainment Gathering in December 2008.
It’s worth thinking about a few key points he makes in his talk.
While we have a feeling that we are in control of all decisions we make, we find it tough to accept the fact that we are merely in just an illusion of making the actual decisions. This is illustrated well with cases of organ donation percentages across countries and the Economist subscription example.
Another interesting point he brings up:
When we build the physical world, we understand our limitations and build around it. But when it comes to the mental world where we design and plan for things like healthcare, stock markets and retirement, we forget the idea that that they too are limited in nature. If we understood our cognitive limitations the same way we understand our physical limitations, and stare at them at the same way, we can design a better world keeping them in mind.
While the irrational decision making has bigger implications on how we design policies and regulations, it would be worth thinking about how we can use these very principles in marketing. So far, all the knowledge we have come across, including how our friend sells waterproof watches to how saree salesmen operate (ask us and we’ll let you in on the secret), most of the selling strategy is intuitive in nature. Combine this study of irrational behaviour with marketing wisdom, and there are many more opportunities that immediately open up in targeting consumers and starting a dialogue with them.
What irrational behaviour observations have you come across lately?