CCI fellows are constantly adding to the knowledge about customer behavior and trends. The CCI Insights Review synthesizes their research and makes it accessible to the broader marketing community for real-world application.
Posts categorized "Behavioral Economics"
Common sense would suggest the following: if you take two objects and differentiate one from the other, then, by definition, they will appear to be more different than they were before, not more similar. Common sense, of course, also once suggested that the sun orbited earth. A fascinating series of experiments out of the Yale Center for Customer Insights found that our perceptions of similarity are more complicated than common sense—and decades-old academic modeling—suggests.
So often, our New Year’s resolutions start with a bang, a kind of forceful reinvention that loses momentum month by month. Better diet, more exercise, greater economy—these drift from reality to something more wishful. So it goes. Consistently making the right choices is hard work, and research out of Yale’s Center for Customer Insights helps to explain why.
The last time you bought a pound of ground beef, you sacrificed more than just a few dollars out of your wallet. You also surrendered your ability to use those few dollars towards any other purchases, from a cup of coffee, to a newspaper, to a tiny fraction of a new BMW. Economists call these sacrifices “opportunity costs”.
The arrival of spring has us cleaning out closets and deciding what we should keep, and what we can toss: The DVDs, clothes, and books from our loved ones. The equal (or likely larger) mound of knickknacks from charities, in thanks for a contribution, in subtle request for the next.
Americans today suffer from a “time famine” – that feeling that there aren’t enough hours in the day to accomplish what we set out to do. As a sign of these busy times, twice as many Americans would prefer two weeks of vacation to two weeks of extra pay. And while there is nothing we can do to add even another minute to our days, we can change our perception of the 24 hours available to us.
Economists and marketers have long assumed that potential customers rationally weigh the costs and benefits of every possible choice before deciding what to buy. Under this assumption, marketers use tidy frameworks to help identify ways to influence consumer decisions.
As it turns out, this assumption is wrong. While shopping, we don't think as much as we think we think.
In an episode of the popular sitcom Seinfeld, George thinks he has purchased a car that once belonged to the actor Jon Voight. In every conversation he finds a way to drop in the name and basks in the reflected glory and people are very impressed with him and his car.