I recently attended a Market Research Society event that gave me lots of food for thought about how we can further embed principles of behavioural economics into our research process here at Code.
At the event, Caroline Hayter discussed how behavioural economics should be seen as a holistic approach; a way of thinking than transcends every aspect of a project, rather than just a method or tool to be used on an ad hoc basis.
What is behavioural economics?
As defined in the Oxford Dictionary, behavioural economic is "a method of economic analysis that applies psychological insights into human behaviour to explain economic decision-making".
According to leading authority on behavioural economics Dan Ariely, "Behavioural economics does not assumes that people are rational. Instead, behavioural economists start by figuring out how people actually behave."
Here are examples of some basic behavioural economics principles:
1. Loss aversion is where consumers believe that the pain of losing something outweighs the benefit of gaining it. For example if you think about selling coffee, a way to play on loss aversion would be to use the slogan 'Don't miss out on your morning coffee'.
2. Herd behaviour is where consumers tend to mimic the behaviour of others. For example, applying the 'selling coffee' metaphor again, an appropriate slogan would be 'Everybody drinks coffee'.
Application of behavioural economics
This is all really interesting but how can we actually apply this holistic thinking around behavioural economics to our understanding of audiences when we go about doing research at Code?
Here's a quick checklist of things we consider:
- What are the biases at play? (How are we recruiting participants? What are our hypotheses?)
- What biases are we bringing to the table ourselves? (Context of the researcher? Have we given enough scope for understanding?)
- What are participants saying and doing in general? (Thinking about participants in a different way and about the interpretation of what people are saying.)
- What is the emotional context? (What is the environment? What other factors are at play that might influence how a person responds or behaves?)
- How are we asking questions? (Caroline says we should never be asking 'why' in research design; instead we should be focussing on the 'where', 'who', 'what', 'when' and 'how' because you'll actually gain a greater understanding by asking around the 'why' question.)
Want to know more?
You'll find lots of general information on behavioural economics in the IPA's Behavioural Economics initiative publications, or you can get in touch with us to discuss.