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Behavioral Economics for Marketers @ LTR by Appboy
The document discusses behavioral economics and its impact on decision-making, highlighting biases such as loss aversion, status quo bias, and confirmation bias. It presents various scenarios illustrating how these biases affect investment choices and risk assessment. Additionally, it emphasizes the importance of understanding these biases to improve financial decision-making.
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Behavioral Economics for Marketers @ LTR by Appboy
- 1. OUR BEHAVIORS GARY BELSKY AUTHOR,WHY SMART PEOPLE MAKE BIG MONEY MISTAKES: LESSONS FROM THE LIFE-CHANGING SCIENCE OF BEHAVIOR ECONOMICS; FORMER EDITOR IN CHIEF, ESPN THE MAGAZINE
- 2. Gary Belsky LTR Conference November5, 2015 DIGITAL ENGAGEMENT: A Behavioral Economics Perspective
- 3. A BRIEF HISTORY OFBEHAVIORAL ECONOMICS DANIEL KAHNEMAN AMOS TVERSKY
- 4. SYSTEM 1 SYSTEM2 ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ? ? ? ? ? ? FAST PARALLEL AUTOMATIC EFFORTLESS ASSOCIATIVE SLOW-LEARNING SLOW SERIAL CONTROLLED EFFORT-FILLED RULE-GOVERNED FLEXIBLE HOW WE DECIDE
- 5. A BRIEF HISTORY OFBEHAVIORAL ECONOMICS BIASED TOWARD BIASES
- 6. An uncle leftyou money, which you must now invest. You’ve narrowed your choices to four options: 1. Shares of XYZ Tech (18%) 2. Shares of ABC Widgets (32%) 3.Treasury bills (18%) 4. Municipal bonds (32%) Which option would you choose? STATUS QUO BIAS
- 7. An uncle hasleft you money invested in XYZ Tech, a volatile Internet company.You’ve narrowed your investment choices to these options: 1. Shares of XYZ Tech (+/-50%) 2. Shares of ABC Widgets 3.Treasury bills 4. Municipal bonds Which option would you choose? STATUS QUO BIAS
- 8. An uncle hasleft you money invested in ABC Widgets, a volatile Internet company.You’ve narrowed your investment choices to these options: 1. Shares of XYZ Tech 2. Shares of ABC Widgets (+/-50%) 3.Treasury bills 4. Municipal bonds Which option would you choose? STATUS QUO BIAS
- 9. An uncle hasleft you money invested in Treasury Bills, a volatile Internet company.You’ve narrowed your investment choices to these options: 1. Shares of XYZ Tech 2. Shares of ABC Widgets 3.Treasury bills (+/-50%) 4. Municipal bonds Which option would you choose? STATUS QUO BIAS
- 10. An uncle hasleft you money invested in Municipal bonds, a volatile Internet company.You’ve narrowed your investment choices to these options: 1. Shares of XYZ Tech 2. Shares of ABC Widgets (50%) 3.Treasury bills 4. Municipal bonds (+/-50%) Which option would you choose? STATUS QUO BIAS
- 11. Confirmation Bias Mental Accounting AvailabilityBias Representativeness Hindsight Bias Money Illusion Base Rate Ignorance Survivorship Bias Anchoring Sunk Cost Fallacy Choice Conflict Planning Fallacy Herding Overconfidence Effect Status Quo Bias Loss Aversion Hot Hand Fallacy Gambler’s Fallacy Focalism Endowment Effect Dunning-Kruger Effect Region-Beta Paradox Immune Neglect Regret Aversion Channel Factors Framing Preferential Bias Tradeoff Contrast Feature Fatigue Extremeness Aversion WHEN SYSTEMS COLLIDE
- 12. A BRIEF HISTORYOF BEHAVIORAL ECONOMICS
- 13. PROSPECTTHEORY: AN ANALYSIS OFDECISION UNDER RISK NOBEL PURSUITS
- 14. Imagine you’ve beengiven $1,000 and are asked to choose between two options. OPTION A: You win an additional $500. OPTION B: You flip a coin. Heads, you get another $1,000.Tails, you get nothing. Which option would you choose? LOSS AVERSION
- 15. Imagine you’ve beengiven $2,000 and are asked to choose between two options. OPTION A: You lose $500. OPTION B: You flip a coin. Heads, you lose $1,000.Tails, you lose nothing. Which option would you choose? LOSS AVERSION
- 16. Confirmation Bias Mental Accounting AvailabilityBias Representativeness Hindsight Bias Money Illusion Base Rate Ignorance Survivorship Bias Anchoring Sunk Cost Fallacy Choice Conflict Planning Fallacy Herding Overconfidence Effect Status Quo Bias Loss Aversion Hot Hand Fallacy Gambler’s Fallacy Focalism Endowment Effect Dunning-Kruger Effect Region-Beta Paradox Immune Neglect Regret Aversion Channel Factors Framing Effects Preferential Bias Tradeoff Contrast Feature Fatigue Extremeness Aversion WHEN SYSTEMS COLLIDE
- 17. • CHANNEL FACTORS SYSTEM1 PROBLEMS
- 18. Man and Tetanusat Yale CHANNEL FACTORS
- 19. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT
- 20.
- 21.
- 22.
- 23. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE
- 24.
- 25. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE • TRADEOFF CONTRAST
- 26. Microwave Special 0.5-cubic footEmerson Microwave, 35% off its $109.99 retail price (57%) *** 0.8-cubic foot Panasonic I Microwave, 35% off its $179.99 retail price (43%) WHICH MICROWAVE DO YOU PREFER? TRADEOFF CONTRAST…
- 27. Microwave Special 0.5-cubic footEmerson Microwave, 35% off its $109.99 retail price (27%) *** 0.8-cubic foot Panasonic Microwave, 35% off its $179.99 retail price (60%) *** 1.1-cubic foot Panasonic II Microwave,10% off its $199.99 retail price (13%) TRADEOFF CONTRAST… WHICH MICROWAVE DO YOU PREFER?
- 28. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE • TRADEOFF CONTRAST • FRAMING EFFECTS
- 29. Imagine you arean army commander, threatened by a superior enemy.Your staff informs you that your troops will be caught in an ambush in which 600 will die—unless you lead them to safety by one of two routes. Route A: 200 soldiers will be saved. Route B: There’s a 1/3 chance all 600 will make it and a 2/3 chance none will. Which route is best? LOSS AVERSION
- 30. Now imagine thatyou are in the same exact situation, but this time your staff describes the following two options: Route A: 400 soldiers will die. Route B: There’s a 1/3 chance no soldiers will be killed and a 2/3 chance that all 600 will perish. Which route is best? LOSS AVERSION
- 31.
- 32. Save Now, SpendLater FRAMING
- 33. A Stitch inTime VS. FRAMING
- 34. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE • TRADEOFF CONTRAST • FRAMING EFFECTS • REGRET AVERSION
- 35. Pat goes tothe movies.At the box office, she is told that as Customer 100,000 she has won $100. Chris is at a different theater, where she is told that as Customer 500,001 she has won $150. Who would you rather be, Pat or Chris? REGRETAVERSION
- 36. Pat goes tothe movies.At the ticket window, she is told that as Customer 100,000 she’s won $100. Chris is at a different theater, where she is told that as Customer 500,001 she wins $150.The 500,000 the customer wins $1,000. Who would you rather be, Pat or Chris? REGRETAVERSION
- 37. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE • TRADEOFF CONTRAST • FRAMING EFFECTS • REGRETAVERSION • HERDING
- 38.
- 39. SYSTEM 1 PROBLEMS •CHANNEL FACTORS • CHOICE CONFLICT • FEATURE FATIGUE • TRADEOFF CONTRAST • FRAMING EFFECTS • REGRET AVERSION • HERDING
- 40. Gary Belsky DIGITAL ENGAGEMENT: ABehavioral Economics Perspective