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A	
  Presenta*on	
  from	
  The	
  NewMR	
  Behaviour	
  
Economics	
  Event	
  
19	
  April	
  2012	
  
Delivering	
  client	
  advantage	
  with	
  Behavioural	
  
Economics	
  
	
  
Bri	
  Williams,	
  People	
  Pa:erns	
  
	
  
Event	
  sponsored	
  by	
  Greenbook	
  
All	
  copyright	
  owned	
  by	
  The	
  Future	
  Place	
  and	
  the	
  presenters	
  of	
  the	
  material	
  
For	
  more	
  informa>on	
  about	
  Greenbook	
  visit	
  www.greenbookblog.org	
  
For	
  more	
  informa>on	
  about	
  NewMR	
  events	
  visit	
  newmr.org	
  
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Delivering client advantage with
Behavioural Economics
Bri Williams
Principal Consultant
People Patterns Pty Ltd
April 2012
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Businesses seek to resolve issues
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
When they are really looking to resolve
behaviour
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
From
Browser
Competitor
Occasional
Low spend
Small
To
Buyer
You
Frequent
High spend
Large
Business is about behavioural change
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Our issue Research Resolution
Businesses turn to Research to resolve
this uncertainty
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Client
issue
Research Resolution
Traditional Research engagement
process
Market
share
decline of
2.5%
> Reinvigorate brand
> Preferred to competitor
> Gain market share
Product
concept Launch
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Client
issue
Research Resolution
Market
share
decline of
2.5%
> Reinvigorate brand
> Preferred to competitor
> Gain market share
Product
concept Launch
Clients can be blindsided by behaviour
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
There is a gap between intended and
actual behaviour
Intended
behaviour
Actual
behaviour
•  Speculative
•  Contextual response
•  Historical
•  Rationalised explanation
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
I will…
I would…
I think…
They did…
I observed…
Most research is based on
might do or have done
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
What
will
they
do?
I will…
I would…
I think…
They did…
I observed…
When clients want will do
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
I will…
I would…
I think…
They did…
I observed…
Behavioural
Economics
They are
likely to…
Behavioural Economics can bridge the gap
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
The study of emotional, cognitive and social
influences on economic decision making
behaviour.
What we do.
How we are influenced.
What we are likely to do.
Behavioural Economics
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
“Rational man” Psychological
needs states
Behavioural
Economics
Behavioural Economics fits between
economics and psychology
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
We are irrational
We are irrational
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
ç	
  
We are irrational
We are irrational Patterns to behaviour
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
Patterns of irrational behaviour are
identified through scientific study
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
These principles can be grouped into
four categories
4. Ownership
Own position
3. Potency
Vividness of outcome
1. Congruence
Make sense of things
2. Simplification
Simplify decisions
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
1.Congruence
1. Congruence
Make sense of things
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
2. Simplification
2. Simplification
Simplify decisions
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
3. Potency
3. Potency
Vividness of outcome
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
4. Ownership
4. Ownership
Own position
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
People Patterns
Behavioural Economics framework
4. Ownership
Own position
3. Potency
Vividness of outcome
1. Congruence
Make sense of things
2. Simplification
Simplify decisions
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Ambiguity	
  
effect	
  Anchoring	
  
Bandwagon	
  effect	
  
Certainty	
  bias	
  
Choice	
  bracke>ng	
  
Clustering	
  illusion	
  
Decoupling	
  
Endowment	
  effect	
  
Diagnosis	
  bias	
  
Framing	
  
Hedonic	
  framing	
  
Hyperbolic	
  discoun>ng	
  
Informa>on	
  avoidance	
  
Actor-­‐observer	
  bias	
  
Availability	
  bias	
  
Impact	
  bias	
  
Mental	
  accoun>ng	
  
Loss	
  aversion	
  
Representa>veness	
  
Resolving	
  cogni>ve	
  
dissonance	
  
Status	
  Quo
(default)	
  bias	
  
Adapta>on	
  
Comple>on	
  
Contra	
  free	
  loading	
  Drop	
  in	
  the	
  bucket	
  effect	
  
Herding	
  
Ikea	
  effect	
  
Not	
  invented	
  here	
  bias	
  
PaPern	
  recogni>on	
  
Procedural	
  fairness	
  
Rela>vity	
  
Revenge	
  
Short	
  term	
  bias	
  
Self	
  herding	
  
Sunk	
  cost	
  
Vividness	
  Fluency	
  
Judgment	
  heuris>c	
  
Halo	
  effect	
  
Systems	
  1	
  &	
  2	
  
Scarcity	
  percep>on	
  
Heuris>cs	
  
Deple>on	
  effects	
  
Free	
  
Inter	
  temporal	
  choice	
  
Confirma>on	
  bias	
   Choice	
  paradox	
  Rules	
  of	
  thumb	
  
People Patterns
Behavioural Economics framework
4. Ownership
Own position
3. Potency
Vividness of outcome
1. Congruence
Make sense of things
2. Simplification
Simplify decisions
Are
likely to
do
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Industry examples of
applied Behavioural Economics
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Are likely
to do
Have
done
Say
they’ll
do
A behavioural framework can deliver answers
about what people will do
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Are likely
to do
Have
done
Say
they’ll
do
Helping your client resolve their issue
3. Potency
Scarcity perception
4. Ownership
Loss aversion
2. Simplification
Bandwagon effect
1.  Congruence
Information avoidance
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Deliver behavioural answers to your
clients
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Thank you
Bri Williams
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Q & A
Sue York
NewMR
Bri Williams
People Patterns
Speaker: Bri Williams, People Patterns, Australia
NewMR Behavioural Economics Event, 19 April 2012, Session 1
Bri Williams
Email bri@peoplepatterns.com.au
Call 0408 392 173
Follow @peoplepatterns
Visit www.peoplepatterns.com.au
Read more on Behavioural Economics
Bri’s blog www.peoplepatterns.com.au
Bri’s book 22 Minutes to a Better Business
A	
  Presenta*on	
  from	
  The	
  NewMR	
  Behaviour	
  
Economics	
  Event	
  
19	
  April	
  2012	
  
Delivering	
  client	
  advantage	
  with	
  Behavioural	
  
Economics	
  
	
  
Bri	
  Williams,	
  People	
  Pa:erns	
  
	
  
Event	
  sponsored	
  by	
  Greenbook	
  
All	
  copyright	
  owned	
  by	
  The	
  Future	
  Place	
  and	
  the	
  presenters	
  of	
  the	
  material	
  
For	
  more	
  informa>on	
  about	
  Greenbook	
  visit	
  www.greenbookblog.org	
  
For	
  more	
  informa>on	
  about	
  NewMR	
  events	
  visit	
  newmr.org	
  

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Bri williams behavioural economics - 2012

  • 1. A  Presenta*on  from  The  NewMR  Behaviour   Economics  Event   19  April  2012   Delivering  client  advantage  with  Behavioural   Economics     Bri  Williams,  People  Pa:erns     Event  sponsored  by  Greenbook   All  copyright  owned  by  The  Future  Place  and  the  presenters  of  the  material   For  more  informa>on  about  Greenbook  visit  www.greenbookblog.org   For  more  informa>on  about  NewMR  events  visit  newmr.org  
  • 2. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Delivering client advantage with Behavioural Economics Bri Williams Principal Consultant People Patterns Pty Ltd April 2012
  • 3. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Businesses seek to resolve issues
  • 4. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 When they are really looking to resolve behaviour
  • 5. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 From Browser Competitor Occasional Low spend Small To Buyer You Frequent High spend Large Business is about behavioural change
  • 6. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Our issue Research Resolution Businesses turn to Research to resolve this uncertainty
  • 7. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Client issue Research Resolution Traditional Research engagement process Market share decline of 2.5% > Reinvigorate brand > Preferred to competitor > Gain market share Product concept Launch
  • 8. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Client issue Research Resolution Market share decline of 2.5% > Reinvigorate brand > Preferred to competitor > Gain market share Product concept Launch Clients can be blindsided by behaviour
  • 9. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 There is a gap between intended and actual behaviour Intended behaviour Actual behaviour •  Speculative •  Contextual response •  Historical •  Rationalised explanation
  • 10. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 I will… I would… I think… They did… I observed… Most research is based on might do or have done
  • 11. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 What will they do? I will… I would… I think… They did… I observed… When clients want will do
  • 12. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 I will… I would… I think… They did… I observed… Behavioural Economics They are likely to… Behavioural Economics can bridge the gap
  • 13. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 The study of emotional, cognitive and social influences on economic decision making behaviour. What we do. How we are influenced. What we are likely to do. Behavioural Economics
  • 14. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 “Rational man” Psychological needs states Behavioural Economics Behavioural Economics fits between economics and psychology
  • 15. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 We are irrational We are irrational
  • 16. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 ç   We are irrational We are irrational Patterns to behaviour
  • 17. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   Patterns of irrational behaviour are identified through scientific study
  • 18. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   These principles can be grouped into four categories 4. Ownership Own position 3. Potency Vividness of outcome 1. Congruence Make sense of things 2. Simplification Simplify decisions
  • 19. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   1.Congruence 1. Congruence Make sense of things
  • 20. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   2. Simplification 2. Simplification Simplify decisions
  • 21. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   3. Potency 3. Potency Vividness of outcome
  • 22. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   4. Ownership 4. Ownership Own position
  • 23. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   People Patterns Behavioural Economics framework 4. Ownership Own position 3. Potency Vividness of outcome 1. Congruence Make sense of things 2. Simplification Simplify decisions
  • 24. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Ambiguity   effect  Anchoring   Bandwagon  effect   Certainty  bias   Choice  bracke>ng   Clustering  illusion   Decoupling   Endowment  effect   Diagnosis  bias   Framing   Hedonic  framing   Hyperbolic  discoun>ng   Informa>on  avoidance   Actor-­‐observer  bias   Availability  bias   Impact  bias   Mental  accoun>ng   Loss  aversion   Representa>veness   Resolving  cogni>ve   dissonance   Status  Quo (default)  bias   Adapta>on   Comple>on   Contra  free  loading  Drop  in  the  bucket  effect   Herding   Ikea  effect   Not  invented  here  bias   PaPern  recogni>on   Procedural  fairness   Rela>vity   Revenge   Short  term  bias   Self  herding   Sunk  cost   Vividness  Fluency   Judgment  heuris>c   Halo  effect   Systems  1  &  2   Scarcity  percep>on   Heuris>cs   Deple>on  effects   Free   Inter  temporal  choice   Confirma>on  bias   Choice  paradox  Rules  of  thumb   People Patterns Behavioural Economics framework 4. Ownership Own position 3. Potency Vividness of outcome 1. Congruence Make sense of things 2. Simplification Simplify decisions Are likely to do
  • 25. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Industry examples of applied Behavioural Economics
  • 26. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Are likely to do Have done Say they’ll do A behavioural framework can deliver answers about what people will do
  • 27. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Are likely to do Have done Say they’ll do Helping your client resolve their issue 3. Potency Scarcity perception 4. Ownership Loss aversion 2. Simplification Bandwagon effect 1.  Congruence Information avoidance
  • 28. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Deliver behavioural answers to your clients
  • 29. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Thank you Bri Williams
  • 30. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Q & A Sue York NewMR Bri Williams People Patterns
  • 31. Speaker: Bri Williams, People Patterns, Australia NewMR Behavioural Economics Event, 19 April 2012, Session 1 Bri Williams Email bri@peoplepatterns.com.au Call 0408 392 173 Follow @peoplepatterns Visit www.peoplepatterns.com.au Read more on Behavioural Economics Bri’s blog www.peoplepatterns.com.au Bri’s book 22 Minutes to a Better Business
  • 32. A  Presenta*on  from  The  NewMR  Behaviour   Economics  Event   19  April  2012   Delivering  client  advantage  with  Behavioural   Economics     Bri  Williams,  People  Pa:erns     Event  sponsored  by  Greenbook   All  copyright  owned  by  The  Future  Place  and  the  presenters  of  the  material   For  more  informa>on  about  Greenbook  visit  www.greenbookblog.org   For  more  informa>on  about  NewMR  events  visit  newmr.org