Behavioural Economics or Fairy Stories - Which a Better Source of Inspiration for Market Research?
Behavioural Economics has blown, is blowing, a wind through the world of Market Research. Innovative MR suppliers - notably Brainjuicer - frequently refer to core BE concepts in their marketing literature or events; Esomar embraces it is a topic regionally even, witness the paper given by Elina Halonen recently at the APAC Event 2015 in Singapore.
BE prods us scientifically, reminding (alerting?) us of the complexity of decision making, highlighting the role of cogntive biases, heuristics, irrationality if you prefer. It also comes with such really juicy terms, such as Hyperbolic Discounting. It's been great in terms of Marketing itself - so shame on us as an industry, and hats off to Mssrs. Ariely, Thaler, Lowenstein etc.
But just how really "wow" is BE?
I'm certainly no stuck-in-the-mud Luddite-style researcher, grumbling that "good research has always known what BE is telling us". Nonetheless, I was brought up short recently by something a very good friend said to me in a discussion about BE. For discussion read: me talking about BE.....;)
Courtesy of the wonderful Rory Sutherland I had chanced upon the findings of a study (http://bit.ly/1Au8qoJ) conducted by academics of US universities measuring the impact of reported happiness over time amongst slum dwellers (sic) who were re-settled to distinctly better housing. I learned the phrase: Hedonic Adaptation.
Wow. Sounded impressive. Wikpedia helped me out with the concept (http://bit.ly/1nLxQqX). The key finding of this particular study was as follows:
"We find that subjective perceptions of well-being improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears."
To quote Rory - from memory, couldn't find his Tweet - slightly depressing if not surprising. Typical BE stuff, for me at least.
I chatted about the study and hedonic adaptation to a friend a day or two later, who in a matter of seconds said: isn't that exactly like the Tale of the Fisherman's Wife from Grimm's Fairy Tales? (http://bit.ly/1FbneW7) My friend is a teacher, by the way. Duh??
I checked it out - hmm....indeed, remarkably similar. My BE hubris took a slight intake of breath.
A brief synopsis of the Grimm tale: a poor fisherman catches a fish (a flounder) that is in reality a prince, and can talk. It pleads with the fisherman to let it go, which he does. Upon relating this tale to his wife, she berates him for not asking the fish to grant him a wish - a nice house instead of the meagre hovel they live in.
The fisherman does as bid, and indeed his wish is granted - the nice house suddenly appears, well equipped with everything you would need for domestic bliss. His wife however quickly becomes dissatisfied, says she needs more space, and sends her husband back to demand a bigger house. So it goes on - her wishes are fulfilled, but she is not satisfied, and wants more and more. Her wishes are granted until finally she wishes to be God.
Whereupon the fish puts them back in their hovel. Poetic justice for a moral tale - you can read here the German original here (http://bit.ly/1HFHSmV.) It's delightfully written.
It's a tale of ingratitude (to fall in with the moralistic perspective) with a mysogynstic slant - based on the principle of Hedonic Adaptation, about 150 years avant la lettre. Not backed up by empiricism, ANOVA, test and control and all the rest of it. But in essence - the same.
So how far has Behavioural Economics really taken us on in understanding our motivations, in discovering new underlying concepts beyond what philosophers, playwrights, physicians, poets, writers of historical merit already knew? The one of course is social science, and the other is Fairy Tale - but the insight value is essentially the same.
What do you think? Has BE really take us further in undestanding la condition humaine? Or is it simply a more precise validation of what many many people already documented over time in the fields of literature and philosophy? BE as the Emperors' new clothing?
I leave this an open-ended post - but with a challenge: how many other core concepts of Behavioural Economics have been preceded by either myth, fairy tales or other literary precedent? Grimm brothers or Kahnemann - who would have won in a battle for the Nobel Prize for Human Insights?
Curious, as ever, as to others' views.