Saturday, 3 July 2010

Taming the ‘Inner Homer Simpson’ in you

As a student of and avid reader in the field of behavioral economics I wanted to mention Sunstien and Thaler’s ‘Nudge: Improving Decisions About Health, Wealth, and Happiness’ (here’s a good review of the book. The book’s an excellent read, and although there are some assertions I may not entirely agree with, it is highly relevant to what we are doing at Bet Buddy. The authors say that everyone’s "Inner Homer Simpson" drives us to make flawed decisions, such as eating too many cashews long after you stopped wanting one to paying insane fees on your credit cards. Why do we make these decisions? We live by rules of thumb, are influenced by irrational cognitive biases, and we live in a world of too many choices, with insufficient time and information to make the best one and little feedback about the stupid choices we've made in the past. So, the etching of black houseflies into the wells of the urinals at Schiphol Airport, under the theory that "if a man sees a fly, he aims at it”, reduced spillage by 80 percent, so was a good thing. And when the ATM beeps to remind you when you've walked away without your bank card is also a good thing. And giving players a gentle nudge or reminder if their play habits change is a good thing too.