Tuesday, June 29, 2010

Homer Economicus

Behavioural economics appears to be at a tipping point in terms of its adoption by businesses and non-economists. Take the latest briefing from Deutsche Bank Research: an excellent primer on why homo economicus has gone the way of the neanderthal. They even suggest that the financial crisis was the result of too much faith in the now extinct 'economic man'. Moreover, if we get the new behavioural economics right we might even avoid another crisis. We shall see.

The IPA in London now has a dedicated website aimed at educating advertisers and marketers to the virtues of behavioural economics. And we learned last week that Obama's administration have taken to using the insights from behavioural economics to sell their policy initiatives to the American voter.

Will it work? Of course it will, up to a point. The challenge - as it is/was with the classical economic treatment of the consumer - will be to avoid treating people as 'dumb' Homer-type folk who don't know when they're being manipulated. That world, and that consumer, is long gone. We are all choice architects now.

1 comment:

  1. But it's adoption by economists in academia is very slow and likely to remain so.


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