Behavioral Public Policy and Economics GmbH
In 2012, Microsoft nearly missed on a huge profitable opportunity if an engineer had not tested a new way of displaying ads on Bing in a controlled experiment – an A/B test. The best performing version created a 12% boost in revenues, amounting to about $100 million additional revenues for Bing each year (HBR 2017).
Imagine your livelihood and that of your neighbors depends on a common resource that replenishes itself naturally. As a community, you learned over time, with a high degree of certainty, the replenishment cycle and were able through social norms and customs to share the common resource. Recently, however, the replenishment cycle rapidly became unpredictable and you, as everyone else, became uncertain about your share. Read More
Resisting temptation can be a real struggle. Self-control problems are life-long companions to many people who often find it hard to adopt better eating or exercise habits, or to stick to other plans they have set for themselves. In turn, the ability to exert self-control helps people achieve their long-term goals.
Have you ever day-dreamed about winning the lottery? You can almost see yourself being happy until the end of your days, spending great holidays in paradisiac beaches while at the same time investing your money wisely to prosper. And what about if you got dismissed from your job for professional misconduct? You would not have time to feel sad or concerned – you’d apply to two or three amazing positions and would certainly get two (or even three!) offers.
A lot of behavioral interventions are expressly designed to be salient, that is, to grab your attention at the time and place where the desired action is made. Many safety campaigns around the world have been using this technique to reduce traffic accidents by displaying “sobering” messages on billboards. The widely held belief is that those messages can motivate drivers to drive more carefully.
It is estimated that billions of dollars in government benefits, which are important for reducing rising income inequality and fostering well-being, are forgone annually in the US by millions of people who are eligible for them. Among other reasons, this participation gap can be due to a lack of awareness, the complexity of the process, or the discomfort around asking for financial help.
The use of auto-renewals in free-trial offers, which seek to lure us into entering a long term subscription, has been exploding recently. But are these offers really successful in changing our subscription behaviors? Or are we gradually becoming suspicious and eventually immune toward them?
Cycling does not only improve your health but is also the most eco-friendly mode of urban transport. For these reasons, many countries have introduced financial incentives to encourage commuters to get on their bikes. But how effective are they in boosting cycling?
Sociologists have observed that humans tend to value symmetric social relations. That is, when we think of someone as a close friend, we also believe that they consider us as theirs.
Of course, not every social relation is symmetric. The other person might think differently about us. However, we tend to overlook such differences and, instead, overgeneralize our view.
In many areas of personal growth, the goals we set are coupled with discomfort and pain that challenge our perseverance and initial motivation. But what if we could embrace the pain as a positive indicator for progress instead of a negative sign of difficulties?