The Institute for Behavioral Economics and Consumer Choice serves the needs of industry in profitably meeting the consumer and regulatory challenges of the 21st century. Firms in the food industry face increasing pressure from government to address their contribution to the prevalence of obesity. Manufacturers and mining firms face increasingly restrictive regulations and taxes designed to reduce their impact on the environment. In each case, traditional economics suggests a direct tradeoff between profits and achieving regulatory goals. Behavioral tools suggest a more innovative solution that can mitigate or even reverse losses in profits while addressing concerns such as how to reduce consumer waste.
Behavioral economics is a field of behavioral science that incorporates insights from psychology, sociology or other social sciences to address shortcomings of traditional economic models of individual choice. This marriage of economics and the other behavioral sciences has led to research that identifies key principles that inform individuals, researchers, and even policy-makers of specific elements of individual behavior that can be leveraged to help individuals make ‘better’ decisions.
Our unique team combines world leading experts in applied behavioral economics, supervising an elite team of professional students. The vision of this team is to produce groundbreaking innovations that are directly applicable to firm decisions with real world relevance. Our experts have a strong tradition of finding innovative solutions to practical industry focused problems. Our team members are highly qualified professional students focusing in one of three main areas of concentration:
Consumers often face the choice between indulgent consumption or responsible consumption—virtue or vice. Such tools can be used to reinforce healthier or more responsible choices without making the consumer feel goaded, judged or restricted all while preserving or even enhancing profits.
As we learn more about the long-term environmental impacts of modern lifestyles, consumers and firms find themselves facing a tradeoff between current payoffs or a more sustainable future. Using behavioral tools, firms can address the increasingly restrictive regulatory environment while creating added value for their consumers.
Financial markets are susceptible to sharp rises and falls often based on irrational responses to changes in market information. Such trading can often eviscerate returns not only of panicky individuals, but also the well-researched institutional investment firms. Using behavioral economic concepts can help minimize the effects of such irrational trading and fluctuations and help preserve value and return on investment.