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Behavioural economics.

On trying to understand why we are so difficult to understand.

I’ve been enjoying reading and interacting with some of Dan Ariely‘s work. Ariely is a professor at Duke University, and author of Predictably Irrational.

Traditional economics looks to identify trends from which (rational) consumer behaviour can be predicted. Behavioural economics, which includes the science of cognitive psychology, seeks to identify trends based on our often irrational behaviour when it comes to making value judgments and decisions. Perhaps behavioural economics is more realistic in the way it deals with imperfect and illogical human beings. Hence the thought-provoking title of the book.

I suspect that behavioural economics is especially important at times like ours, where new technology disrupts and even shakes the foundations of traditional economics, as markets, business models, distribution channels, ideas of production and consumption, and consumer behaviour, all change and morph as we progress through the information revolution.

As I think about the people I meet, work and interact with on a regular basis, their experience of and engagement with new technology sits somewhere on an incredibly broad spectrum. Surely this has to make traditional models of economics difficult to work with, when society finds itself so fragmented in its experience of the technology that is shaping it beyond what would have been recognisable only 10-20 years ago.

And so I think behavioural economics has a lot to offer in helping us understand human behaviour; when all around us traditional models are challenged, what can we understand about underlying motivations to help us shape the environment is such a way as to meet the various needs of those around us, and develop technology appropriately, as a means to serve.

All the more reason to continue dipping my toe into issues of sociology and cognitive psychology, and bringing the bible to bear on what is revealed to be eternally true about human nature.

Side thought: does traditional science look for order and logic, where psychology looks to understand disorder and imperfection (realism)?

Andy Moore

I work as Head of Global Communications for the International Fellowship of Evangelical Students (IFES), having previously worked with Compudava (now Endava) in Moldova, building web applications, and for Wesley Management, working with small businesses and charities. I have a passion to see intelligent application of digital technology to serve the Church and mission. Married to the lovely Ruth.

Comments

Penny Vinden
Reply

I’d say clinical psychology tends toward an understanding of disorder and imperfection…but define such things on a very clear (but is it biblical?) idea of what order and perfection are. Behavioural economics certainly is intriguing – all the more so when you ‘do’ it in a variety of socio-cultural contexts. For example, consumer behaviour is going to look radically different and have different causes for a farmer in Mexico and a financial consultant in London.

Keep up the good blogging!!

Andy Moore

Thanks Penny – that helps bring a bit more clarity to my thinking. And it’s always good to be reminded that the breadth of human experience encompasses much cultural diversity (and more!), not just a range of experience of the latest technologies.

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