The brain is a big black hole. With cracks, crevices and long, sinewy tunnels that, despite the advances in resonance imaging, are virtually uncharted. But there’s an approach rising in prominence that’s helping professional persuaders shed more light on the secret processes of the cerebellum. It’s called behavioral economics.
Recently, I had the privilege of attending The Behavioral Summit hosted by global consulting firm Ideas42. The event centered on the fallibility of human decision-making and how organizations can help people make better choices through a deeper understanding of mental models.
In a nutshell, behavioral economics is a method of analysis that applies psychological insights to decision-making. Although it’s been present in academia for years, the field of behavioral economics is currently experiencing a boom—much to the dismay of the old school supply-and-demand-man and his BFF, homo economicus.
What behavioral economists have come to realize is that we are ruled by what’s called “bounded rationality.” This means that, because we don’t have the mental bandwidth needed to analyze every decision in detail, our brains use shortcuts—known as heuristics—that often produce errors. Officially referred to as cognitive biases, these errors can be seen virtually everywhere (Advertisers take note).
One example of bias is anchoring, which describes the human tendency to rely too heavily on information provided early on in a decision-making process. (Like when an initial price on a used car sets the standard for the rest of the negotiation.) Others like loss aversion, confirmation bias and the endowment effect (which is when people ascribe additional value to items they own) were popular discussion points at the summit, too.
In an interactive presentation, Christopher Graves, President of Ogilvy’s behavioral science unit, explored the weaknesses of human estimation. He asserted that people aren’t good at predicting what they’ll do in the future, so business practitioners must look deeper into self-reported answers within market research.
Robert Cialdini, best-selling author and social psychologist, was also in NYC for the event. Discussing the human need to relate, he talked about how “convert communicators” can be used as a powerful force for social cohesion. Essentially, convert communicators are the testimonials of those who are similar to the audience (like in age, race, mindset or political view). For example, it’s been shown that political phone canvassers who say they are locals are far more successful at soliciting donations than those who aren’t. Commonality signals safety to our brains, which encourages conformity.
Long story short, our brains are busted. And knowing that perfect rationality is more or less made up, agencies now have the license to step away from rational, feature-benefit messages to design communications that leverage identity. For instance, DeBeers doesn’t talk about the clarity, color or cut of their diamonds. No, they’ve built a cultural behavior around their product that exalts purity and uprightness—which happens to attract consumers who see themselves that way.
Behavioral economics allow us to build a business case for breaking the rules of rationality. (Something which good copy and art have strived to do since pen first met paper.) It unlocks possibility. And as a creative, that’s really good news.
So, the next time you’re traveling down the cavernous void of the mind, hold fast to the biology of the brain. Let it embolden you. And remember this quote by Robert Frost for good measure, “Forgive me my nonsense, as I also forgive the nonsense of those that think they talk sense.”
People are irrational—what a relief. Want to connect with them more thoughtfully? Reach out to us.
Because we don’t have the mental bandwidth needed to analyze every decision in detail, our brains use shortcuts—known as heuristics—that often produce errors.
About the Author
A tenured copywriter, Marly specializes in verbal strategy and brand voice development. Out of the office, she’s an incessant champion of her family’s happiness and regularly pens vignettes inspired by magical realism and nonsense literature. As she puts it, “I didn’t choose writing. It chose me.”