Why we don't think the way we think we think: The theory and application of behavioural economics

Abstract

A new body of thinking under the portmanteau term of behavioural economics (BE) challenges many of the rigidly held but poorly supported practices of marketing and sales which would love to see ‘consumers’ as rational, economic agents, easily wooed by appeals to their conscious rationality. Instead, the BE enterprise suggests that marketing has to acknowledge that humans are far messier, more unpredictable, and ruled by forces that they are often not aware of. Until the concepts of heuristics and satisficing, and the power of System 1 and the rule of context are fully appreciated and implemented, many of those working in marketing and communications are doomed to irritate and alienate those people they most want to attract or retain.