Marcus Tay's List: Behavioural Economics

• allowing consumers to delay payment can dramatically increase their willingness to buy
• time value of money makes future payments less costly than immediate ones
• emotions experienced
• present—now—
• mental accounting”
• Windfall gains and pocket money are usually the easiest for consumers to spend. Income is less easy to relinquish, and savings the most difficult of all

  • tackle casinos and kids
• We have already credited your account with 100 calls—how could you use those?” Many customers did not want to give up free talk time they felt they already owned.

  • rescripting
• negative halo”—a heightened awareness that every option requires you to forgo desirable features available in some other product. Reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.

  • Less choices work. Also because more choices make you more aware the shortfall of each choice
• why marketers sometimes benefit from offering a few clearly inferior options. Even if they don’t sell, they may increase sales of slightly better products the store really wants to move.

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• documents on which cheating often occurs, like tax forms and car insurance policies. Typically, individuals fill out information first, creatively or honestly, only attesting to accuracy with a signature at the end. But researchers sent an audit form to customers of an auto insurer, asking for their signatures at the top, like a swearing-in before court testimony. This form resulted in a 10.25 percent bump in the mileage reported, even though higher mileage usually translates into higher premiums.
• • How to design to reduce cheating in forms