Economics - interesting? Apparently, it is...
Kay-Yut Chen is somewhat of a phenomenon when it comes to the world of economics. He was the first to install an experimental economics lab within a corporation; the purpose of which is to discover the reasons behind the choices consumers make. In Secrets of the MoneyLab, Chen and co-author, Marina Krakovsky (a renowned journalist), undertake to enlighten readers about the findings of various studies and experiments and the impact such knowledge could have on your business. Whilst the concept of corporate-led economic experimentation is pretty groundbreaking – the question is: are the findings?
Analysis of topics such as: trust, fairness and reciprocity amongst others; Secrets of the MoneyLab is a lesson in how humanity penetrates even the stone cold heart of finance and preaches about the dangers of ignoring the person behind the customer. The actual experimental trials are intriguing: discovering how people would rather lose out than accept an “unfair” deal, or how individuals can be persuaded to part with more money if given something for free (the more emotive the free gift, the better), or how we are all essentially selfish, if not quite greedy. But is this totally unexpected behaviour? Hardly. Putting it into a business context; understanding this behaviour and anticipating it, even manipulating it, now that is a novel approach.
However, even the authors themselves fully acknowledge that the culmination of the knowledge gleaned from such in-house experimentation is already used in business practices by certain individuals. They refer to these individuals as having ‘business acumen’ or ‘business sense’. These are those individuals who have an innate ability to apply business principles without necessarily understanding the science.
Secrets of the MoneyLab has an engaging style, the authors neither talk down to the reader, nor alienates him through jargon-laden verbal debris. Instead this is an insightful and frank dialogue about the value of trying before you buy (or testing a marketing idea or product on a small scale before leaping into the deep end). This is not a “how to” guide, however. It’s more of a “this is what happens when…” reference book. Big business has a lot to gain from experimental economics; for the little guy, it could be the difference between sink or swim – that’s if they can figure out how to apply the principles to their business.
We interview C J Daugherty about Night School
- 10 January 2012