Behavioural Economics

Let's start with this article by introducing you to the world of behavioural economics. What is it? It is literally as it sounds. Its where the behavioural sciences meet the world of economics. It’s the field of study in psychology that looks at how or why we make economic decisions. Yes, it’s a thing, and it’s a serious area of academic research. It is also something that many advertisers and marketers are turning to in order to influence us more effectively. Not to mention political parties and the like

Why should we be concerned? Well, we all know that the advertising and marketing men and women of the world have conspired for years to persuade us to part with our hard-earned cash. And we all know that politicians have tried to influence our thinking with propaganda and lies so why should this be anything different.

The difference here is that while in the 70’s, 80’s and 90’s even early 2000’s this was mainly considered the “Art of Persuasion” these studies and techniques are turning it into an actual science. And human beings are the Guinea Pigs.

More importantly with the onset of big data and digital marketing tools, political parties and big business can not only get their messages to you quicker and easier, but they can also track the results and through behavioural economics use nudges and techniques to more efficiently manipulate you into taking one course of action or another. And they can do it in real time. In the moment.

Behavioural Economics is not all bad, but like most things, in the hands of the wrong people, it can have damaging consequences. In the hands of the right people, it can be an instrumental set of tools, techniques and learning that can bring about positive social and behavioural change. Which is actually where the science and its founders started their thinking to bring about more effective results from social and behavioural change campaigns. We will look to share some of these via this site over the course of the next few months as they may get you thinking about ways you could use similar techniques and ideas to bring about social change in your community or for your cause. Ethically of course.

In the world of behavioural economics (this is different to psychometric profiling and NLP which we will cover in later posts) there are a few categories that we would describe as the primary focus.

  1. Nudging; made famous by the book Nudge, the idea behind nudging is that you gently nudge the prospect, consumer, decision maker in a certain direction by indirect persuasive actions without being overt in any way shape or form.
    1. A famous one they talk about in the videos and the training is the hotel room note that says something along the line of “thinking of the enviroment do you really need your towels changed every day? 80% of the previous guest who used this room only had their towels changed after two or three days”. This nudge has worked so amazingly and saved so much money for hotels around the world that you now see it or a version of it everywhere.
    2. Another one (its slightly gross but makes the point about how different and varied these nudges can be) is the sticker of a fly in a mens urinal. Giving men something to aim for has done wonders for some mens rooms around the world. See the photo of this I took in Munster Airport.
  2. Scarcity; is the rule of making the offer or chance limited to a few. People want what they cant have. By making is scarce you make it desirable.
    1. So “for a limited time only” or “sale ends this weekend”, “places are filling up fast only seats left”. And so on.
  3. Framing: this is the art of framing a product or point of view in such a way as to make it appealing or unappealing depending upon what you are looking to achieve. This technique is also a part of NLP. In NLP we would use words in a certain way as to frame what we are saying in a positive light using the propects perferred (but unconcious) language set. You can also do this visually or use other sense. You can even bed this in with social proofing and different persuasion techniques.
  4. Norms: social proofing slips into the next trick which is norms. Models of what is “normal” as in other people are doing it so should I? As if the behaviour is the norm. If you take just these first four if you put them all together in one pitch or offer and sprinkled in with some NLP, you would have some compelling tools.
  5. Defaults: we go for the most comfortable option that takes the least cognitive effort, yes because we are lazy. So when there is a default option we are more often to go with this
    1. An example of this is with organ donors. Studies have shown that one way to increase organ donors sign up is to make it as a default option for some medical forms etc., meaning that you have to opt out of it. Although this would be done ethically and made clear on the paperwork because it is the default option people tended to leave it in place. If they had to fill out a form to opt into being and organ donor with the default option being not to be one, then people would tend to not bother. Too much cognitive effort. Flip this over to people needing to fill out a form to opt out of being an organ donor and the same happens, they just don’t bother. Meaning it is not the organ donation they have problems with it’s the 30 seconds of cognitive effort. Scary but true.
      1. Put this into a commercial offering or political framework, and this could be quite scary. Be on the look out for defaults. It might take more cognitive effort, but it might be worth it
  6. Priming: again this is used in NLP as well as behavioural economics, but priming is a technique of setting the scene before the scene is seen. Adding subconscious cues that prime the subject to think or answer or act in a certain way ahead of the actual event. Subtle hints and so forth that the person is not even aware of on a conscious level.
    1. Mentalists will do this as will advertisers and salespeople and no doubt politicians to. It's manipulation and persuasion with preplanning at its core.
  7. Commitment; this is a powerful technique and one that has been used on prisoners of war in certain countries. Once someone has committed or announced a particular course of action, a way of being or social standpoint on a subject, it is hard to deviate from it, and they end up going along with their previous commitment even if they were initially uncomfortable with it. In some wars, soldiers would be persuaded, threaten or tortured into making an announcement to the rest of the camp over the speakers that their captors were good strong, solid people and that their regime was just for what they were doing. The soldiers would be doing this out of desperation for food or water or whatever it was they were in need of at the time but then later when they had come to their senses their captors found that these prisoners would go along with what they had announced to the rest of the camp. They would become model prisoners causing no problems and even becoming aids to the guards against other prisoners. They were subconsciously living up to the commitments they had made publicly. To say that it is unnerving to know that this is being taught to advertising and marketing professionals and no doubt already known by political parties is scary. Be careful what you sign up for.
    1. One example of how this works was in one small town in America where they were having problems with people driving too fast in the town and getting accidents. Residents were asked if they would put a big sign on their front lawn that said something like “Drive Slow. Save Lives!” most people said no because the signs were big and ugly. But when they were asked if they would wear a small badge that said this they said: “yes of course.” So a week or two later these same people that wore the badge were then approached by the same organisation and asked would they mind sticking a sticker in their front room window. Now those people said to themselves (internally) ‘well I am the sort of person who wears a badge that says that. Which means I am the kind of person who would stick a sticker in my front window that says that too’ (you see where this is going). Think about it when you wear that badge for the political candidate that you are not quite sure about yet). And yes you guessed it. A few weeks later these same people how initially said no when asked if they would put a sign on their front lawn said to themselves “well if I am the kind of person who wears a badge that says it. And I am the kind of person who has a sticker in their front window that says, it then surely I am the kind of person who would put a sign outside on my lawn that says the same.” From one small commitment of a badge people who then went on to agree to have a sign on their front lawn went up around 70%.
      1. Small commitments lead to bigger ones, especially when those promises become part of your identity.

These techniques may seem very manipulative, and that is because they are. We are only really scratching the surface here of behavioural economics and how it is used. We will go deeper into this subject in future posts, but it's worth being aware that these techniques are out their and they are being used. Used on you and me every day.

If you are someone who is trying to get your point across or to get people to sign up to your cause but you keep losing out to the opposition even though you have all the facts and figures. If yours is the most logical argument, but you are losing the debate could these techniques be being used by the other side. Or could you consider using them to win people over to your side? Could you use them to challenge harmful norms and antisocial behaviour?

What about Ethics

Ethical internal debates arise, and this is a controversial subject. But one I am passionate about. I have studied behavioural economics, psychology and NLP as well as digital and direct marketing and communication for the last 15 years or so mainly because I am fascinated by it. I am interested in how and why we make decisions, sometimes very illogical ones. I am intrigued how we are persuaded or manipulated this way or that. And I am equally fascinated by how communication can break down or be used to unduly influence us towards adverse outcomes.

You could, and should, question my motives for posting a blog like this. Naturally for me its to make people aware of these techniques and how they are used. Believing wholeheartedly that the people reading this blog will be doing so out of good intentions and will only ever be looking to educate themselves to protect themselves and others. I know you will use this information wisely and ethically. Quite frankly you can go to university and study this subject in depth if you wish. I aim to give you enough information to protect yourself and make you influential in your ability to get your positive message of change across and through to people who otherwise might not be listening.


A couple of resources to consider on this subject –


  1. The Behavioural Insights Team – set up by the UK government this team of academics and practitioners is tasked with using behavioural and social sciences to tackle social issues in the UK …. That’s right they were set up by politicians… they have done some fantastic work but you could question for all of the work they are proud to show us what are they not showing us? Hopefully nothing >>>
  2. In the US there is a similar team called the Social and Behavioural Science Team and their work (that we know of) can be found here
  3. Also here is something I posted earlier this llast about how the US election and Brexit was won using psychometrics, big data and behavioural marketing (before Cambridge Analytica got into all the trouble and controversy Psychographic Profiling, Big Data and Behavioural Marketing Communications Win Elections and Votes


Interested in finding out more about Behavioral Insights, Behavioural Economics, Persuasion and Communications Science

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