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Predictions for the next decade in Behavioral Science

Behavioral Scientist have put together their favourite predictions, ideas, worries and challenges in the field of behavioral science for the next decade. We were delighted they accepted our pitch on cogitive economics as one of the new oppportunities in the future!

Here is our prediction for the future - what is yours?

"The twenty-first century is pushing us toward an ever more digital, information-driven, persuasion-based global economy—just as a new set of tools are emerging in neuroscience and psychology that offer the power to understand these phenomena in a new way. Cognitive economics is a new field rooted in behavioral economics, paralleling the shift from behavioral to cognitive psychology. Rather than focusing on biases in choices between material goods, cognitive economists explore how people consume intangible products with their minds.

Consumers no longer strive to acquire only material goods or earn the most money. Instead, they seek purpose, symbolic value, intense e…

Am I the person Dominic Cummings is looking for? A followup to The Times

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For those interested in a bit more background to my Times article today, here are some details on how Cummings's topics have showed up in my cognitive economics research. You can judge for yourself if I have spotted what he is working towards.

Starting with Judea Pearl's modelling of causality. Pearl developed a way of using graphs (a kind of diagram showing a network of relationships between objects – like the chocolate example below) to express and work out cause-and-effect relationships. For example, you might use them to determine whether smoking causes cancer, or carbon dioxide causes global warming – or more locally, whether cutting Universal Credit reduces unemployment.

Quite often, we find that when scientists discover something about the structure of the world, the human brain has got there before us. The brain has evolved to seek out cause-and-effect relations in the world around us, and assemble them into a graph just like this. It learns the relationships by obser…

Other writers on System 3

Since last year I have been discussing the idea of "System 3" - a set of mental capabilities and processes involved in imagination and mental simulation. These capabilities appear to be used for several mental activities, notably:

planning and thinking about the futurecounterfactual reasoningdaydreaming and mind-wanderingconsumption of fictionmental replay of past experiencesand in empathetically considering how other people experience an event

Recently some other writers in the market research industry and elsewhere have been discussing System 3. Here are some of their thoughts:
Kathryn Ambroze at HCD with a detailed writeup of a System 3 approach including examplesAmbroze also takes an in-depth look at different models of thought, contextualising System 3 as a way to model future thinking or prospectionThomas George of DoWell Research, on using System 3 to build brandsBrian Carruthers of WARC, reviewing my System 3 talk at IIeX AmsterdamESOMAR Director-General Finn Raben wr…

Book review: Alchemy, by Rory Sutherland

Rory Sutherland's new book Alchemy: The Surprising Power of Ideas that Don't Make Sense continues his 10-year campaign against the traditional, logical pursuit of business advantage, through a scientific lens that includes several cognitive economics themes. As ever, a curated series of amusing anecdotes about people or companies who took an unusual angle on marketing or product invention, fuel a philosophical wander.

That philosophy could be summarised as: if it makes sense, someone's already tried it. So try something that doesn't.

The ideas that underpin the book are broadly based on behavioural economics and cognitive science, with bits of evolutionary theory, statistics and old-fashioned advertising intuition thrown in. At first it doesn't look like a behavioural science book as such: the theoretical backbone takes a while to show. Rory's style is discursive: an after-dinner-talk of anecdotes, dismantling of conventional wisdom, ever-so-slightly outrageou…

From Behavioral to Cognitive Pricing

Below is an article by Leigh published in INsights magazine. The magazine published by the Neuromarketing Science & Business Association. See the article in its full glory here or just the text below.

Behavioral pricing has been used for many years but is essentially based on changing customers' behavior without creating new value. Cognitive pricing is a new paradigm in which the customer's positive mental experience can be given a monetary value.

The ability of companies to earn premium prices for their products and services is under threat. The rise of the Internet in general, and price comparison websites in particular, makes it easier for consumers to compare products, harder for brands to stand out from the competition, and risks turning many categories of product into commodities. And being commoditized usually means lower profits and less innovation. The emergence of behavioral economics gave marketers a new set of tools to maintain an edge: the techniques of beha…

What is cognitive economics?

What's happening inside your head right now? What thoughts, feelings, ideas are spinning around in there? Are they important to you? If you were not able to think those thoughts, would you care? How much does your internal mental experience matter to you?

To an economist: not at all. Traditional economics explicitly rules out any consideration of how people think, and what is going on in their minds or hearts. Economists only trust what they can observe: specifically, the things you buy and sell. This can include selling your labour (for a wage) and buying and selling services, but in practice it mostly means the physical goods that we buy and consume.

Yet most of us know there is more to life than buying and selling. The activities inside our heads are a major – maybe the major – contributor to our quality of life. Are you happy? Do you have purpose in your life and work? Do you feel appreciated? Are you looking forward to the future or anxious about it?

Our state of mind is of …

Why endings matter [spoiler-free Game of Thrones references]

It probably has not escaped your notice that the Game of Thrones TV series finished this week. If you use social media at all, I suspect you also saw some anguished squawks about how awful the ending was. How the incompetent writers screwed it all up. Maybe you even signed the petition, along with 1.5 million others, to have the last series remade with a different conclusion.

Personally I thought it wasn't a bad outcome, but I seem to be in the minority. Either way, why does this have such significance?

I read a counterargument a few days ago: You've had 70 hours of enjoyment already – it's in the bank. You enjoyed episode 1, 2, 3, …and you can't go back and "unenjoy" them now. One bad hour at the end can't rewind the clock and eliminate the last 8 years of pleasure?

Yet this feels wrong. The ending can ruin the beginning. Why should this be?

A model from cognitive economics may have the answer. The theory of "cognitive goods" says that watchin…