Behavioural economics: a con?

Kahneman, as a psychologist, is annoyed at the monopoly that economists have built on policy-making, which he points out may be because whilst people are willing to admit their ignorance about economics, they tend to believe they naturally understand psychology. 

Much of what he says here is decidedly tongue in cheek, but something does cut through his false outrage.

Swap ‘economists’ for ‘management consultants’ or ‘ad agencies’, and ‘policy-making’ for ‘brand strategy’ and I suspect a few researchers may well sympathise… His general point is that, unfortunately, the tag ‘behavioural economist’ gives more credibility than ‘psychologist’, and Kahneman feels psychologists have been a bit hard done by. As a former anthropology student, it feels unnatural to advocate for psychologists (at university these two departments were very literally arranged opposing each other down two sides of a corridor), but on this I’m inclined to agree with him.

Apologies to the psychologists, economists, and perhaps even behavioural economists I’m about to misrepresent here, but, broadly speaking:

Psychology: develops a theory based on what’s already known, tests the hypothesis with a controlled experiment, then refines the theory based on the evidence

Behavioural economics: says orthodox economists totally misunderstand people by assuming they’re 100% rational (which is a bit unfair, but it makes for a nice narrative). Other than this, it’s often psychologists carrying out experiments as above…

Perhaps not a million miles away from each other. So is behavioural economics just a useful name? The original article had caught my eye after a query at Tonic NYC about what behavioural economics really is, and I suppose that’s the answer. In some ways, it’s just a marketing strategy to gain more impact from psychological insights. 

But I sympathise. Isn’t that something we should be aiming to help research clients do too? Does the label of ‘researcher’ hurt us in exactly the same way as Kahneman feels ‘psychologist’ does? Maybe, but that’s a discussion for another day.

Most great examples of behaviour-changing ideas are a combination of psychological, marketing, and business insights – even when that’s then called behavioural economics. Our priority as an agency, I think, should be to keep absorbing ideas from across disciplines, and aiming to be well-rounded insight specialists, regardless of what we label ourselves as. Ultimately, that is how we’re be able to produce the valuable work clients need and help it get the traction it deserves. 

In the end though, even Kahneman compromises and suggests we all settle for ‘behavioural scientists’. Perhaps he’s used his psychology to brainwash me, but I’m happy to agree. Ask any researcher – client-side, agency-side, psychologist, or governmental – if it’s helping great insight get things done, it’s got to be a good thing.

Charlie Richards is an account director at Tonic Insight