Behavorial Economics
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By our very nature, humans are imperfect – we procrastinate, stray off our diets, get overwhelmed and can be shaped by our experience. Understanding Behavioral Economics and what drives human nature can help leaders in every industry, from education to social services and health.
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Behavorial Economics
- 1. Behavioral Economics May 25, 2016 SUZANNE SMITH, MBA suzanne@socialimpactarchitects.com
- 3. @socialtrendspot www.socialimpactarchitects.com • Actual Humans • Flawed • Biased • Emotional • Lack self- control • Social animals 3 • Economists • Smart • Rational • Self- interested • Utility maximizers
- 5. @socialtrendspot www.socialimpactarchitects.com 5 VP of Sales, Small Business HR Manager, Fortune 500 Company City Manager Medium-Sized City
- 14. @socialtrendspot www.socialimpactarchitects.com 14 Measureable Goals Clear Target Audience Unforgettable Message Right Channels
- 17. @socialtrendspot www.socialimpactarchitects.com 17 socialimpactarchitects.com/wp CHECK OUT THESE BLOGS: SOCIAL MARKETING http://socialimpactarchitects.com/wp/soci al-marketing-lessons-from-dont-mess- with-texas BEHAVIORAL ECONOMICS http://socialimpactarchitects.com/wp/beh avioral-economics-meets-the-social-sector STORYTELLING http://socialimpactarchitects.com/wp/less ons-from-dr-seuss-on-the-power-of- storytelling CROWDFUNDING socialimpactarchitects.com/wp/the-dos- and-donts-of-crowdfunding OUT-OF-THE-BOX FUNDRAISING IDEAS socialimpactarchitects.com/wp/out-of-the- box-fundraising-ideas
- 18. @socialtrendspot www.socialimpactarchitects.com 18 Suzanne Smith, MBA Founder & Managing Director, Social Impact Architects National Member • Senior Policy Advisor, Social Enterprise Alliance • Consultant Member, Society for Organizational Learning • Research Fellow, Center for the Advancement of Social Entrepreneurship at Duke University (CASE) • Alumni Council, Fuqua School of Business at Duke University Local Leader • Adjunct Professor – University of North Texas • Dallas, Texas – South Dallas/Fair Park Trust, Mayor’s Task Force on Poverty, Dallas Business Club, Entrepreneurs for North Texas, Leadership Dallas, Leadership North Texas & Junior League • Cincinnati, Ohio – Flywheel: Social Enterprise Hub Awards & Honors • Dallas Regional Chamber, Young ATHENA Award, 2014 • Huffington Post’s Top 10 Social Sector Blog, 2014 • Dallas Business Journal’s 40 Under 40 Award, 2012 • Next Generation Social Entrepreneurs Award, 2010 SocialImpactArchitects @snstexas @socialtrendspot company/social-impact-architects in/suzannesmithtx suzanne@socialimpactarchitects.com www.socialimpactarchitects.com
Notas del editor
- In business school, I was a teaching assistant for one of my favorite professors, John Lynch. He mentioned that a former student of his, Dan Ariely, was returning to Duke to teach behavioral economics, and suggested I take the class. I must confess that my first reaction as a second-year MBA student was not very positive: “Economics – I think I have had enough of that type of course!” He then explained that behavioral economics was a new discipline that was turning traditional economics, which assumes humans make rational decisions, upside down. This is why we don’t save enough for retirement. It’s why we eat that piece of chocolate cake right in front of us, even though we’re on a diet. It’s why we don’t take our blood pressure medicine even though we desperately want to avoid a stroke that might happen years later. All of these things reflect errors in which we focus too much on the present and not enough on the future.
- Behavioral economists believe that human decision-making is often imperfect and imprecise. By our very nature, humans are imperfect – we procrastinate, stray off our diets, get overwhelmed and can be shaped by our experience. For example, one study of Asian-American women showed that when primed to think about their gender before taking a math test, they performed below average, but when they were primed to think about their race, they performed above average. What explains this change? Our expectations change the way we experience situations and can lead to different results. In the end, I did take Dan Ariely’s class and loved it so much that I became his research assistant. He has gone on to become a celebrity author of four books on the subject and has been featured in The New York Times and Scientific American. Now, as I work with clients and speak about social change, I use behavioral economics examples in my work as much as possible. How often do many of us work against what is in our best interest? How can we engineer a system that makes it easier to make the right decisions? Or, as psychologist Daniel Kahneman suggests – how do you “achieve medium-sized gains by nano-sized investments?”
- Whether you think it is humans, there is also the environment. We have 5,000 messages coming into the brain in any given decision – this decision is a health decision and see all the factors at play. Why – driving home
- Leverage these practices for your work – “psych tricks that require design”
- Why this presentation? My observation…. I have worked in the nonprofit sector for over 15 years – both directly and now as a consultant. We get so many things right – we are a passionate people who care about others – our clients, each other. We believe in our work. However, in the past decade, doing good isn’t good enough anymore. Can I get an amen? We have to prove that we have made a difference – through numbers and spreadsheets. In my opinion, this pendulum shift has been good, but has swung too far in one direction. As with everything, we need to find a balance between the numbers and the people. We also get too close to our work – we use lingo that the everyday person doesn’t understand – e.g. recidivism rates, pro-social behaviors, workforce development. The timing couldn’t be better – we need to find a better way to communicate about our organization’s success and the people we serve. So, I dug deep to find resources from the best and the brightest and plan to answer the following questions for you today: Why? What? How? The original presentation is 3 hours, but I have condensed the information into 1 hour of the best tidbits related to your work as social enterprises.