A few years ago, a marketing team from a major consumer goods company came to my lab eager to test some new pricing mechanisms using principles of behavioral economics. We decided to start by testing the allure of “free,” a subject my…
A few weeks ago, the New York Times announced that they would start charging readers for online content in early 2011, and since then the million-dollar question has been: will it work? Will readers fork over the cash to keep reading the…
A few weeks ago Reebok unveiled a walking shoe purported to tone muscles to a greater extent than your average sneaker. All you had to do was slip on a pair of EasyTone and the rest would take care of itself. Exercise…
Consider some of illusion at the bottom of the demo page (click here to see it). The two middle color patches look as if they are different, but in fact they are exactly the same. What is gong on here? How can…
Motivating people is an extremely difficult and delicate task as anyone who’s ever taught, managed, collaborated with or given birth to someone knows. In business, as opposed to say, child-rearing, the debate is slightly less daunting, though not always much clearer. For…
In a follow-up to the much acclaimed “Pinch of Saffron” , this latest Predictably Irrational Short Story is a thrilling Wall Street tale of overpricing CDOs, again written by one of my Behavioral Economics students, Andrew Holmberg. It’s entitled, “Fixed Income”, and…
This is another lovely example of people getting annoyed with companies (this time with United Airlines over breaking up a Taylor guitar), and making it into a revenge type of advertisement.
I pleased to announce a new series of short fictional stories written by Duke undergraduate students who took my Behavioral Economics class this last spring. I will post another one of these stories twice a month for the next few months. The…
“For the great majority of mankind are satisfied with appearances, as though they were realities, and are more often influenced by the things that ‘seem’ than by those that ‘are.’” -16th-century Italian politician Niccolo Machiavelli It’s something we come across regularly: presentation…
What if on your next coffee run, you discover that Starbucks has started running on the honor system? All the baristas are gone, and in their place, you find Tupperware filled with coins and bills. Would you pay for your daily soy…