Psychology in Marketing
‘Behavioural economics’ is a hot topic in today’s business world. In 2002, Daniel Kahneman won the Nobel Prize in Economics for his work on prospect theory, explaining how people assess risk when spending money. More recently, Dan Ariely’s TED talks on irrational behaviour have had millions of online views, and Thaler & Sunstein’s book (2008) about decision making entitled ‘Nudge’ became a global bestseller. This work led to the formation of the UK Government’s Behavioural Insights Team, which aims to help people make better choices for themselves. Researchers in this field are often referred to as behavioural economists. Some argue that behavioural economics research is not really economics: it is psychology. Others might describe it as the study of cognitive psychology. Often it is the study of cognitive psychology in relation to consumer behaviour which makes it highly relevant to marketers. Potential areas of study include: the presentation of messages through priming, framing or anchoring; developing pricing strategies or understanding social behaviour among consumers.