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w21: Behavioural economics VII /2548

Topic 3

Learning materials ‘handout’

w21: Applications of behavioural economics [pdf]

Main reading

Ariely, D (2009), Predictably irrational – The hidden forces that shape our decisions (revised ed), London: Harper

Duhigg, C (2012), How Companies Learn Your SecretsNew York Times, Feb 16th

Economist (2010), The data delugeThe Economist, Feb 25th

Gabaix, X and Laibson, D (2005), Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets, NBER Working paper 11755 [Published as Gabaix, Xavier and Laibson, David (2006), “Shrouded Attributes, Consumer Myopia, And Information Suppression In Competitive Markets,” Quarterly Journal of Economics, v121 (2, May), 505-540]

Huber, J and Puto, C (1983), Market boundaries and product choice: Illustrating attraction and substitution effectsJournal of Consumer Research, V10 No 1, June, pp31-44

Iyengar, S and Lepper, M (2000), When Choice is demotivating: Can one desire too much of a good thing?Journal of Personality and Social Psychology, Vol. 79, No. 6, pp995-1006

Iyengar, Sheena (2010), The art of choosing, London: Little, Brown [see her 2010 TED talk too]

Naughton, J (2019), ‘The goal is to automate us’: welcome to the age of surveillance capitalism, The Observer, Jan 20th [see also Bridle, J (2019), The Age of Surveillance Capitalism by Shoshana Zuboff review – we are the pawns, The Guardian, Feb 2nd]

Poundstone, William (2010), Priceless: the myth of fair value (and how to take advantage of it), New York: Hill & Wang

Simonson, I and Tversky, A (1992), Choice in Context: Tradeoff Contrast and Extremeness Aversion, Journal of Marketing Research, Vol. 29, No. 3 (Aug.), pp. 281-295 [available from ProQuest via the Library]

Thaler, R (1985), Mental accounting and consumer choice, Marketing Science, Vol. 4, No. 3, Summer, pp. 199-214

Examples and illustration

Policy application

Bateson, M et al (2006), Cues of being watched enhance cooperation in a real-world settingBiology Letters

Kedmey, D (2014), This Is How Uber’s ‘Surge Pricing’ Works, Time, Dec 15th

Wilson, DS (2016), The Tragedy of the Commons: How Elinor Ostrom Solved One of Life’s Greatest Dilemmas, Evonomics, Oct 29th

Wikipedia entry on Elinor Ostrom and Ostrom’s Nobel Prize information

Application by firms

Butler, S and Goodley, S (2015), Sports Direct: it’s all about discounts, but are they what they seem?The Guardian, Dec 10th

Clifford, S and Rampell, C (2013), Sometimes, We Want Prices to Fool UsNew York Times, April 13th

Fazackerley, A (2021), ‘Price gouging from Covid’: student ebooks costing up to 500% more than in print, The Guardian, Jan 29th

Poundstone, W (2017), The hidden psychology of menu design, Wired, April 10th

Sullivan, B (2012), ‘Fair and square’ pricing? That’ll never work, JC Penney. We like being shafted, Red Tape Chronicles on NBC News, May 25th

Other stuff

BBC (2019), Behavioural science in the workplace, The Bottom Line, BBC Radio 4, Feb 16th [well worth a listen]