Message to New and Prospective Students at Cornell University for Applied Behavioral Economics in Finance and Marketing (AEM 6150 – Spring 2022)

Welcome to Applied Behavioral Economics in Finance and Marketing (AEM 6150)!

This new course is geared toward developing knowledge, ability, and professional skills to apply behavioral economics in business settings. The course is especially geared toward students who may consider future professions in consumer finance, marketing, product development, data science, or consulting/advisory. Because this is a 7-week course, I assume that you have some exposure to behavioral science concepts (e.g., AEM 6140 – Behavioral and Managerial Decision Making or equivalent background). If you do not, I have identified some supplemental readings in the syllabus that you should consider reviewing; you should also contact me (sds77@cornell.edu) so that we can better assess whether the course is right for you.

In terms of personal background, I am a new, incoming faculty member at Cornell. I have a non-traditional background and have spent more than 30 years in the corporate world with more than a decade of those years setting up behavioral science units and initiatives in the real world (e.g., nudge units). I continue to work full-time as a consultant and researcher in the behavioral economics space. I especially bring my experience in setting up some of the first nudge units in the world to the design of this course (which includes some cases from companies I have worked with). I am also a Cornell alum who has had a very fortunate career, and so I have a deep attachment to the community here. I would like you to be challenged in this course and succeed in life beyond Cornell. If you would like to learn more about my background, please refer to my bio.

Thank you for considering taking this course. Please feel free to reach out to me via email if you have any questions (sds77@cornell.edu).

Things a Consultant Can Do to Increase the Chances of Their Recommendations Being Implemented Successfully by a Client

This post is based on a question that was posed to me on Quora.

Here are a few things to consider for this type of situation:

  • See if you can get a resource assigned within the company to take the lead on program managing changes into the organization. Also to help increase the probability of success, see if the incentives of the assigned resources and sponsor can be aligned with the initiative outcomes.
  • If you have the skillset and desire, propose extending your contract to potentially help with piloting and incubating the new changes. You could structure your contract to include performance outcomes if you haven’t already done that for the prior phase.
  • Potentially partner with another consultant that has experience with implementing changes within an organization. This could become part of a longer-run business model for you.

A Call for the Heterogeneity Revolution in Behavioral Science

This article should be on every modern behavioral science researcher’s reading list for a cohesive view of the future. It will take awhile for the community (both research and applied) to wrap our heads around elevating heterogeneity and context relative to main effects.

Bryan, C.J., Tipton, E. and Yeager, D.S., 2021. Behavioural science is unlikely to change the world without a heterogeneity revolution. Nature Human Behaviour, pp.1-10.

https://t.co/i2o04QfbVQ?amp=1

I Am a Cat That Knows Behavioral Economics

Information Reframing: Which is more appealing? A black cat with a white belly or…
…a white belly with a black cat?
Active Choice: Would you rather prepare for your PhD viva or pet me?
Choice Overload: Do you find it difficult to choose given all of these books?
Behavior and Technology: Daniel Kahneman intimates that technology may eventually be better than humans at decision making, so I am going to be wary of this robot for cat welfare worldwide.

What Can User Experience (UX) Designers Learn from the Field of Behavioral Economics?

This post is based on a question that I answered previously on Quora.

Although it’s not exclusively from the realm of behavioral economics, the notion of A/B testing is something that I often try to work with companies to include. On the one hand this includes the capabilities of companies to integrate specific aspects of their product management, software development, UX, data science, and marketing processes. But it also means developing a research mindset that comes from the experimental side of behavioral economics. For example, if one really wants to nail down which aspects of a UX or customer experience affect behavior and outcomes, the gold standard is using randomized assignment, A/B testing, and discipline that between testing conditions only one item is changed. In setting up the A and B test conditions for a behavioral insights based UX isolation test, one can add, subtract, or substitute a single element between two test conditions. If you change more than one element, then your findings will be confounded between the multiple elements changed, and you won’t be able to tell what change worked or didn’t. UX teams should become used to working in worlds that include testing harnesses like Visual Website Optimizer, Optimizely, and the like.

For a little more on A/B testing, see this WSJ article by one of my colleagues. It describes a simple, but extremely powerful A/B test we worked on with a FinTech company’s UX. It’s Time to A/B Test Your Financial Life

If you are interested in other aspects related to the digital UX world and behavioral economics, you might also want to check out a book that was written by two of my colleagues: The Smarter Screen: Surprising Ways to Influence and Improve Online Behavior.