"Humans are Predictably Irrational"
Richard H.Thaler. Economics Nobel Laureate 2017
"Humans are Predictably Irrational"
Richard H.Thaler. Economics Nobel Laureate 2017
Experiment with Experimental Economics
Feelings, incentives, and the decision-making atmosphere of 'real people'
Imagine an ideal world
According to the economic theory, decisions should be made by the formula cost-benefit. We should always make optimal decisions. Nevertheless, people are human and are influenced by other factors such as feelings and emotions. Identifying, measuring and optimising those factors is the aim of behavioural experimental economics. Daniel Kahneman, Prize in Economic Sciences in 2002, was a pioneer on the utilization of this innovative science. Nowadays, Richar H. Thaler is the main figure since he has been awarded the Nobel Price in 2017 for his work on behavioural economics.
People do not do what they say. Feelings
People act in an emotional way, focusing on some aspects and forgetting about others. Neuroscience explains this phenomena throughout heuristics, defined as subconcious and emotional thoughts producing automatic decision making process.
Think fast. Intuition
These mistakes are not the consequence of brain failures. On the contrary: as far as it is impossible to use all available information people make decisions according to their intuition. This intuition provides shortcuts in order to save time and effort to your brain.
Behavioural Economics
Behavioural Economics does not aim to teach how to make good decisions. What it does is just to create the most appropiate environment for the user to make the best decision. This is called arquitecture choice. Behaviuoral economics aims to introduce small changes in the decision process that will end up in big results. The combination of behavioural economics together with experimental economics and game theory allow us not only to validate the strategy but also to make the economectric analysis. It enables us to make improvements and sharp the strategy till the highest rate of efficiency .
"People are predictably irrational"
- Experiment with their irrationality to make your strategy more effective -
Take out uncertainty
Meet the result of your strategy before its implementation. Analyse real behaviour and forget about theoretical and hypothetical answers. Eliminate the impact on brand image.
Reduce investment
Allocate resources to key factors influencing users and customers. Identify inefficient strategies and stop wasting money on the development of unsuccessful products and services.
Optimize strategies and results
The final report will identify key factors and rate of impact. This will enable your organization to build the best strategy to meet the goals.
Our Projects
From the initial idea to the perfect strategy
Initial diagnosis
A team of economists, engineers, mathematicians and marketers will analyse the requirements, ideas and objectives of the customer. The objective of this first stage is to clarify the questions that the projects need to answer. Key variables to be analysed and the sample pool are also defined at this stage.
Experimental Design
LINEEX develops the most appropiate technology and environment according to the needs of the project. The experiment is developed througout a controlled environment composed by different scenaries. At every scene, LINEEX introduces small changes aiming to modify behaviour of those who will make decisions. They can be implemented via the local Laboratory, online or mobile depending on the location of the target to be analysed.
Incentive Design
The research team will define incentives and will align them with the pool preferences. This is the methodology of experimental economics which guarantees real behaviour. LINEEX does not develop pools or focus groups just because there are many evidences that people do not do what thay say they will do. Since people lie, it is necessary to link their behaviour with a future status.
Impact test and strategy validation
Once we have the experimental design, subject pool and incentives, it is time to develop a behavioural test (experiments) in order to collect the data. This will provide the appropiate information to validate the strategy.
Futhermore, the test will show the rate of impact depending on the targeted audience.
Final report
(1) High success - the strategy works and it is ready to be implemented.
(2) Low successs - the strategy meets some of the objectives but not all of them. It needs to be redesigned and optimised.
(3) No success. The strategy does not meet any of the proposed objectives. In case of implementation all resources invested will be wasted.
Having this information, clients will be able to implement/design the strategy which best aligns with the organization objectives.
LINEEX Services
UX / USER EXPERIENCE
User experience optimization
POLICY MAKING
Measuring impact of new policies
BRANDING AND PRODUCT DESIGN
Identifying the best mix of atributes for a product
PRICING. WILLINGNESS TO PAY
Price setting according to perceived value
COMMUNICATION
Defining types of messages for goals achievement
CONSUMER LOYALTY
Analysing commercial strategies
ONLINE BEHAVIOUR
Modifying online behaviour
HUMAN RESOURCES
Optimizing organizational performance
CONVERSION FUNNEL
Raise the rate of converted leads
MARKET ANALYSIS
Target identification
Contact us
FIRMS AND PUBLIC INSTITUTIONS
LINEEX Methodology
Behavioral Experimental Economics
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