Physics. Design. Psychology. Defense Mechanisms. Behavioural Economics. Behavioural Economics Applied. Eric Friedman - Marketing.fm. The case for behavioral strategy - McKinsey Quarterly - Strategy. Once heretical, behavioral economics is now mainstream.
Money managers employ its insights about the limits of rationality in understanding investor behavior and exploiting stock-pricing anomalies. Policy makers use behavioral principles to boost participation in retirement-savings plans. Marketers now understand why some promotions entice consumers and others don’t.
Yet very few corporate strategists making important decisions consciously take into account the cognitive biases—systematic tendencies to deviate from rational calculations—revealed by behavioral economics. It’s easy to see why: unlike in fields such as finance and marketing, where executives can use psychology to make the most of the biases residing in others, in strategic decision making leaders need to recognize their own biases.