What's the buzz about behavioural economics?

Wendy Gordon

Behavioural economics challenges established research practices, but the benefits for marketers are potentially significant if the industry joins in tackling these challenges

There is huge excitement about behavioural economics (BE) in the marketing, advertising and research communities. BE challenges the assumption of rational man. It combines insights and understanding from both economic theory and social psychology to develop a model of human behaviour that acknowledges the inherent biases and distortions that characterise much of our decision-making. BE codifies principles of human behaviour that explain much of the puzzle of inconsistent and sometimes downright poor decision-making.

So, once the fundamental nature of a specific behaviour is better understood, theoretically, interventions can be designed to achieve a desired outcome, such as not using mobile phones while driving.