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Your Customers, Employees, Managers and Stakeholders are all Irrational: Behavioral Economics
Jaap de Jonge, CEO, Netherlands, Editor
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 'Predictably Irrational: The Hidden Forces That Shape Our Decisions', 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. Register
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Human Emotions
Colin Downey Behaviours stem from the physical state of wanting to avoid pain and gain pleasure. Many decisions become irrational as you are dealing with hu...  |
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Behavioral Economics
Judy Nelson I've been thinking a lot about the BE article since I first read it. The continuing revelations of brain research may make the conversation moot event... |
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Not Economically Rational
Gill If you read Dan's book and his experiments, you will see that customers are not rational even economically, that is, pertaining to price. Presu... |
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Cognitive Behavior in Money Management
Ronald Gross I believe most members will find "The Seven Deadly Sins of Money Managers" written by James Montier to be invaluable. Although there are differences ... |
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Going for the Gain
Richard Cushing Dan Ariely should read Ludwig Von Mises' HUMAN ACTION, if he has not done so already. Human beings will ALWAYS take the action that they deem to be... |
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Cognitive Capacity
Zen There is a new trending of awareness in this arena. I've witnessed how 'present' conversations transcend past or future concerns to bring a powerful a... |
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Special Interest Group Leader
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Cognitive Bias
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