Behavior science plays an important part in understanding how customers perceive and engage with a product. It therefore plays an integral role in many successful tech companies, impacting the product design, user journey and product messaging.
In a recent session that Prof. Ariely had with one of the entrepreneurs that we are working with, they explored how customers in emerging markets perceive the concept of insurance; How do you convince people that earn a meager wage that health insurance or unemployment insurance is important? How do you explain to them that it makes sense to put aside a small sum for a service that they perceive is “virtual” and that they may or may not need?
If you are a fintech entrepreneur and are interested to learn more about how Behavioral Economics can improve the effectiveness of your product, we recommend to start with the following books:
The Invisible Gorilla – Chabris and Simons combine the work of other researchers with their own findings on attention, perception, memory, and reasoning to reveal how faulty intuitions often get us into trouble.
Why smart people make stupid money mistakes – In their fascinating investigation of the ways we handle money, Gary Belsky and Thomas Gilovich reveal the psychological forces—the patterns of thinking and decision making—behind seemingly irrational behavior. They explain why so many otherwise savvy people make foolish financial choices.
Thinking fast and slow – Daniel Kahneman, the renowned psychologist and winner of the Nobel Prize in Economics, takes us on a groundbreaking tour of the mind and explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The impact of overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the profound effect of cognitive biases on everything from playing the stock market to planning our next vacation―each of these can be understood only by knowing how the two systems shape our judgments and decisions.