Forwards or backwards: Trains of thought in behavioural economics

I’ve travelled on a few trains through NSW recently and have marveled at something that regular commuters probably take for granted – seats that can be repositioned to face forwards or backwards.

Having never seen them before, I have delighted in watching passengers reconfigure the space to suit their needs.

And these flip seats remind me of the flexibility behavioural economics provides.

Where in one situation a behavioural principle might be a barrier to behaviour, in another it might be an enabler.

Take Loss Aversion for instance.

In some cases our fear of what we have to lose will stop us from taking action – I call this negative tension.

In others, it is our fear of NOT taking action that provokes us to more forward – I call this positive tension.

In business or in your personal life this means you need to overcome negative tension and/or draw on positive tension in order to get people to change behaviour.  In short, give me nothing to fear or something to fear if you want my attention.

Social Norms is another principle that can be flipped. In some cases Social Norms can stop behaviour – for instance if I feel that it would mark me out as being abnormal, whereas in others it can influence me to change – if people I admire are doing it for example.

It is this flexibility that adds to the allure for me of applied behavioural economics because once you understand the principles you can use them for seemingly opposing behavioural objectives.

Forwards or backwards, stopping or starting, behavioural economics is a smart way to reconfigure behaviour.

Bri Williams runs People Patterns, a consultancy specialising in the application of behavioural economics to everyday business issues.