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w9-10: Case 3 – Behavioural economics /2548

Download and print the worksheet and bring that (and the articles) to the seminar.

Read the articles below (at a minimum, the primary three) and answer the questions on the worksheet.

Bring your completed worksheet to the seminar. No prep = no play – you will be excluded from the seminar if you have not prepared. You have been warned.

Discussion questions

  1. Summarise the broad case that is made for applying behavioural economics to firms’ relationships with their customers?
  2. Identify two distinct instances where firms could apply specific behavioural economics approaches to encourage consumers to purchase (and highlight what biases or behavioural responses are relied upon in each case).
  3. Explain how advertising may exploit Kahneman’s System 1 / System 2 categorization of thought processes.
  4. What ethical concerns might there be when firms exploit consumers’ biases?

Primary reading

The Economist (2013), Nothing more than feelings, The Economist, Dec 7th

Strong, C and Koutmeridou, K (2013), Behavioral economics and the customer journey, GfK, Feb 27th

Background reading

The Economist (2008), The science of shopping: The way the brain buysThe Economist, 20th Dec

Thompson, D (2012), The 11 ways that consumers are hopeless at mathThe Atlantic, July 6th [a brief summary of some of Poundstone’s book]