Thinking Like a Behavioral Economist

Transcription

1 Thinking Like a Behavioral Economist Chaning Jang, PhD SBCC Summit, Nusa Dua April 17, 2018

2 Does the world need another acronym?

3 This talk Think like a Behavioral Economist Understand the WEIRD problem BE + SBCC

4 Thinking Like a Behavioral Economist Behavioral Science in Action

5 How many animals did Moses take into the Ark?

6 How many animals did Moses take into the Ark?

7 Take out your phone and look at the number of the last person you called.

8 Reuse your towel to help the environment....the majority of guests reuse their towels.. Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius. "A room with a viewpoint: Using social norms to motivate environmental conservation in hotels." Journal of consumer Research 35.3 (2008):

9 37% 43% Reuse your towel to help the environment....the majority of guests reuse their towels.. Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius. "A room with a viewpoint: Using social norms to motivate environmental conservation in hotels." Journal of consumer Research 35.3 (2008):

10 37% 43% 49% Reuse your towel to help the environment....the majority of guests reuse their towels....the majority of guests in your room reuse their towels.. Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius. "A room with a viewpoint: Using social norms to motivate environmental conservation in hotels." Journal of consumer Research 35.3 (2008):

11 Rational

12 BIASES LIMITED ATTENTION Rational HEURISTICS BOUNDED RATIONALITY FALLACIES

13 Predictably Irrational

14 Behavioral Economics and the W.E.I.R.D problem

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17 Western Educated Industrialized Rich Democratic

18 Predictably Irrational

19 But context and scarcity can shift the weighting and availability.

20 Assume you were given a choice. 60 USD today 75 USD next month

21 Assume you were given another choice. 60 USD in 6 months 75 USD in 7 months

22 One month today is not the same as one month half a year from now Prefers today Prefers 6 months 0 All Rich Poor Holla and Datta (forthcoming). Frames, Scarcity and Values: Evidence from a 4-Country Study of Behavioral Biases.

23 A psychological poverty trap?

24 Understanding context and scarcity matters.

25 About Busara Center for Behavioral Economics

26 Our mission is to advance and apply behavioral science in pursuit of poverty alleviation.

27 Businesses Government Non-Profits Foundations

28 69 active projects 112 completed projects 3 decision labs Country Offices Project Presence 145 full-time staff

29 BE + SBCC What s different? What s the same?

30 Good economists copy, great economists steal

31 Where s the economics?

32 Modeling Prediction based on individual utility maximization

33 Modeling Data Prediction based on individual utility maximization Measures, labs, bigdata

34 Modeling Data Causality Prediction based on individual utility maximization Measures, labs, bigdata The R word

35 What you ll get working with a behavioral economist:

36 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior

37 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality

38 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality Good with data (not good with budgets/finance)

39 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality Good with data (not good with budgets/finance) New jargon to impress your friends

40 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality Good with data (not good with budgets/finance) New jargon to impress your friends Frequent misuse of the word qualitative research

41 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality Good with data (not good with budgets/finance) New jargon to impress your friends Frequent misuse of the word qualitative research An incomplete model of human behavior

42 What you ll get working with a behavioral economist: Laser-focus on mechanisms driving individual behavior Unreasonable obsession with causality Good with data (not good with budgets/finance) New jargon to impress your friends Frequent misuse of the word qualitative research An incomplete model of human behavior (Hopefully) some new tools to solve the same problems

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44 How to incorporate Behavioral Economics into your work.

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47 Biases you ll see at SBCC A practical

48 @shuvin Social Herding

49 @priydee Planning Fallacy

50 @krgranger In-group / Out-group identity

51 @erinplaw Defaults

52 Reference Dependent Preferences

53 @erinplaw Choice Overload

54 @TrevMoMatic Loss Avengers Aversion

55 Does the world need another acronym?

56 What lessons can we learn about combining new disciplines into SBCC?

57 Thank You!