Behavioural economics builds on traditional economic models with insights from behavioural science, offering a framework to further understand and predict customer decisions and market outcomes. Here’s how:
Public and private sector clients are increasingly harnessing the power of behavioural economics to influence consumer behaviours. A behavioural insights approach can help unearth short-term and long-term actionable strategies and foster positive community outcomes.
Governments are increasingly fond of using 'nudges'. These can be simple yet profound, ranging from nudging people to pay their taxes on time to boosting organ donation rates. Not only are these nudges often highly effective, but they’re also cost-effective.
But the potential applications of behavioural economics stretch beyond these simpler strategies. It can help identify where our decisions may be flawed and identify solutions to encourage efficient and effective decision making in the face of important constraints. This might include analysing.
At Frontier Economics, we collaborate with our clients to craft an approach and methodology grounded in behavioural economics. Given the importance of context we rely on data analysis to diagnose problems or identify biases and testing, trials and other methodologies (such as games) to identify optimal interventions that achieve desired outcomes. Blending economics with behavioural science provides a sophisticated toolkit with which to study customer decisions.