Behavioral Economics Again

Overhype

from the if-you're-so-smart...- dept

I’ve been interested in behavioral economics for quite a while, and have read a lot concerning Thaler’s theories. Business 2.0 has an article all about an economist that is trying to go beyond Thaler with his behavioral economic studies. The conclusion he comes to is that people are highly suggestable. Why this is even remotely surprising shocks me. I don’t see how this counters traditional economics at all. If you have a product, one way to increase the price people are willing to pay is through marketing that product – and making the perceived value higher than it was before. I don’t think anyone ever thought that eveyone automatically knows the exact price they’re willing to pay for something. Convincing people that a certain price is appropriate has always been a part of marketing, and fits perfectly with traditional economic theories. This isn’t rocket science, and I don’t think it’s particularly new to economics either.