Your Customers, Employees, Managers and Stakeholders are all Irrational: Behavioral Economics

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Cognitive Bias > Best Practices > Your Customers, Employees, Managers and Stakeholders are all Irrational: Behavioral Economics

Your Customers, Employees, Managers and Stakeholders are all Irrational: Behavioral Economics
Jaap de Jonge, Editor, Netherlands
Most writers treat Cognitive Bias as a negative phenomenon that explains why humans (managers) are incapable of making rational decisions. In their view cognitive bias is frustrating rational decision-making. Dan Ariely, Prof at Duke University, author of '', in last HBR is introducing another view and proposes to replace rational economics (based on the assumption that humans fundamentally make rational decisions and that the market's invisible hand serves as a trustworthy corrective to imbalance) by behavioral economics (based on the assumption that humans fundamentally make irrational decisions and are motivated by the invisible hand of unconscious cognitive biases). In behavioral economics, customers, employees, managers and stakeholders are assumed emotional, myopic and easily confused and distracted. Experimenting with things such as bonus schedules, product pricing, consumer choices and employee behavior are crucial to predict behavior. Ariely warns that the BE process is time (...) Read more? Sign up for free

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Cognitive Bias
Summary
Forum
Stories About Human Biases 😃
🔥Overview of 180+ Cognitive Biases
What are Heuristics?
Best Practices
Your Customers, Employees, Managers and Stakeholders are all Irrational: Behavioral Economics
🥈How to Avoid Biases in Recruitment and Talent Management
🥉Cognitive Bias Literature
How to Fight Cognitive Bias?
How to Overcome Judgement Noise
Outcome Bias in Decision Making
Perceptions Errors and Cognitive Bias are Similar


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