Nobody is doing more to add to our knowledge of the irrational side of human behavior than Dan Ariely. Not only does he conduct experiments that are elegant in their simplicity, but he writes about his work and that of other researchers in a highly acccessible way. Upside is the successor to the bestselling Predictably Irrational, and it takes to new topics, ranging from CEO pay to speed dating.
As the current financial chaos moves toward some kind of resolution, there will no doubt be plenty of Monday morning quarterbacking to explain what went wrong. One group that one wouldn’t expect to have explanations are neuroscientists. As it turns out, neuroscience researchers actually can shed some light on why things went so wrong.
One of the first questions that everyone asks is how so many seemingly intelligent people could make so many errors in judgment. One simple answer, of course, is greed – at least some individuals saw a way to profit personally by making poor business decisions (loaning money to people unlikely to be able to pay it back, insuring such loans, rating securities based on these shaky loans, and so on). While there’s little doubt in my mind that personal interest was the biggest underlying factor, systemic factors and even biology likely played a role. By systemic factors I mean the way many of these markets were structured. Writing a shaky loan sounds like a bad business decision, but if there are buyers for loans of this type perhaps it really isn’t a bad decision for the originator. But, on to the brain science… […]
Book Review: Sway – The Irresistible Pull of Irrational Behavior
We love irrational behavior here at Neuromarketing – when humans act in illogical and unexpected ways, that behavior provides clues to their real motivations. This understanding may, in turn, also help marketers develop products and promotions better suited to the real needs and desires of their customers. Plus, it’s fun to write about the funny things we rational humans do in real life. […]
Businesses are often portrayed as rapacious partners, seeking to squeeze every penny out of their deals. Indeed, some are… the result is often a relationship between defined by a fat contract that seeks to protect both parties against bad behavior by the other. New research, which draws on both conventional research and brain-scan driven neuroeconomics studies, reaches the surprising conclusion that fairness is the key to maximizing profits: […]
There’s more proof that the hormone oxytocin is an important factor in our social behavior. Previously, the brain chemical was shown to be associated with trust (see Building Trust: Chemical Neuromarketing). Now, researcher Paul Zak, a professor of economics and director of the Center for Neuroeconomics Studies at Claremont Graduate University in California, has shown that subjects who inhaled oxytocin gave away 80% more money than subjects who inhaled a placebo. […]
How does marketing to high-testosterone males differ from pitching their lower testosterone counterparts? And who are those testosterone-rich individuals?
Recent neuroeconomics research gives us some clues. As reported in the New Scientist, Harvard researcher Terry Burnham tested male subjects with […]
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