The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

In this episode of The Brainy Business podcast, you'll hear an insightful interview with Vishal George, a behavioral scientist and author of the book Money Mindsets. Vishal's expertise lies in combining behavioral science with human-centered design and systems thinking. He shares examples of his work, including a project in New Zealand aimed at reducing businesses' carbon emissions by using the messenger effect of young people's voices. The conversation then delves into the importance of understanding our own money stories and how they shape our financial behavior. Vishal emphasizes the need to break the taboo surrounding money conversations and draws inspiration from children's natural curiosity about money. The episode explores the intersection of behavioral science and personal finance, providing practical insights for improving financial well-being. Whether you're looking to make better financial decisions or increase your savings, this episode offers valuable strategies and perspectives. In this episode: Gain insights from behavioral science to make better financial decisions and improve your financial well-being. Break the stigma around money by engaging in open and honest conversations, leading to a healthier relationship with your finances. Cultivate curiosity to enhance your financial decision-making skills, allowing you to make informed choices that align with your financial goals. Design financial products and services that take into account human behavior, ultimately helping you achieve your financial objectives more effectively. Explore the benefits of creating spaces for open conversations about money and financial goals, fostering a supportive community that empowers individuals to take control of their finances. Show Notes: 00:00:00 - Introduction, Melina welcomes Vishal George to The Brainy Business podcast to discuss his book Money Mindsets and his work as a behavioral scientist. 00:03:57 - Using Behavioral Science to Reduce Carbon Footprints, Vishal shares an example of a project where he worked with the government of New Zealand to reduce businesses' carbon emissions. By designing experiments and testing different strategies, they discovered that the messenger effect, particularly the voice of the next generation, was the most effective in motivating businesses to reduce their carbon footprint. 00:09:16 - The Power of Testing High-Risk Ideas, Vishal emphasizes the importance of testing high-risk ideas, even if they may seem unconventional or counterintuitive. By pushing the boundaries and exploring extreme ideas, it becomes easier to find the middle ground and identify innovative solutions. 00:12:10 - The Inspiration Behind Money Mindsets, Vishal explains that his inspiration for writing Money Mindsets was to provide a positive and impactful resource for individuals, particularly young males, to explore emotions, feelings, and empathy through the topic of money. The book aims to help readers understand their own emotions surrounding money and empathize with others in different circumstances. 00:13:54 - The Emotional Aspect of Money, Vishal discusses how money evokes various emotions in people and how understanding these emotions can lead to a healthier relationship with money. He emphasizes the importance of exploring and acknowledging our emotions surrounding money in order to be more financially informed. 00:18:53 - Importance of Breaking Through the Stigma Around Money, Vishal discusses the importance of breaking through the stigma surrounding money and suggests that cultivating curiosity about money can help individuals make more intentional financial decisions. He also mentions the abundance of financial products and services that can lead to overspending. 00:21:38 - Two Types of Curiosity and Building Financial Knowledge, Vishal explains the two types of curiosity: diversity curiosity and epistemic curiosity. He suggests that building curiosity about money and related topics can help individuals make better financial decisions. He recommends clustering reading on topics like saving, spending behaviors, habits, motivation, and behavior change. 00:25:06 - Visible Spending and Invisible Saving, Vishal discusses the shift from visible saving in the past to visible spending in the present. He highlights how technologies and digital currency have made spending behaviors more visible while saving behaviors remain invisible. He emphasizes the need to talk more openly about saving to reduce stigma and foster motivation. 00:27:16 - Overcoming Challenges in Talking About Money, Vishal addresses the challenge of talking about money, particularly when it comes to accomplishments like being debt-free. He acknowledges the fear of bragging or making others feel inadequate, but emphasizes the importance of sharing positive financial experiences to break the cycle of assumption and encourage others to pursue financial goals. 00:36:31 - Designing Products and Services for Human Behavior, The conversation begins by discussing two approaches to designing products and services with consideration for human behavior. The first approach focuses on removing barriers and making it easier for people to achieve their goals. The second approach explores the motivation and factors that drive individuals to set and achieve their goals. 00:37:30 - The Challenge of Saving Money, The conversation shifts to the challenge of saving money and the difficulty in resisting one-time expenses. Vishal shares a story about a person named Kaya who struggles to save money due to various events and temptations. This highlights the need for financial institutions to create products and tools that make saving money as easy as spending money. 00:40:34 - Creating Products that Facilitate Saving, Vishal discusses the importance of balancing spending and saving by creating products that make saving money just as easy as spending money. An example is given of a bank that offers a program called "Save the Change" which automatically rounds up purchases and transfers the spare change to a savings account. This removes friction and encourages saving. 00:42:14 - The Role of Friction in Breaking Habits, The conversation explores the role of friction in breaking habits. While removing friction can make it easier to save money, adding some friction can help evaluate the necessity of certain actions. An example is given of introducing a process for employees to justify business travel, which adds a little bit of friction to assess if the travel is truly necessary. 00:45:49 - Conclusion, Melina's top insights from the conversation. What stuck with you while listening to the episode? What are you going to try? Come share it with Melina on social media -- you'll find her as @thebrainybiz everywhere and as Melina Palmer on LinkedIn. Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation. Let's connect: Melina@TheBrainyBusiness.com The Brainy Business® on Facebook The Brainy Business on Twitter The Brainy Business on Instagram The Brainy Business on LinkedIn Melina on LinkedIn The Brainy Business on Youtube Connect with Vishal: Follow Vishal on LinkedIn Behavioural by Design website Money Mindsets book page Learn and Support The Brainy Business: Check out and get your copies of Melina's Books. Get the Books Mentioned on (or related to) this Episode: Money Mindsets, by Vishal George Get It Done, by Ayelet Fishbach Engaged, by Amy Bucher Designing for Behavior Change, by Steve Wendel Your Future Self, by Hal Hershfield Top Recommended Next Episode: Pain of Paying (ep 240) Already Heard That One? Try These: Common Errors in Financial Decision Making, with Chuck Howard (ep 213) Mental Accounting (ep 282) Why Every Business Needs To Care About Personal Finance, with Merle van den Akker (ep 283) Sustainable Nudges at Walmart (ep 206) Framing (ep 296) Saving Peru's Environment One Nudge at a Time (ep 195) Corporate Social Responsibility Programs that Work (ep 211) Engaged, with Amy Bucher (ep 164) Designing for Behavior Change, with Steve Wendel (ep 116) Priming (ep 252) Herding (ep 264) The Power of Metaphor, with Olson Zaltman (ep 181) A More Beautiful Question, with Warren Berger (ep 200) Get It Done, with Ayelet Fishback (ep 332) Time Discounting (ep 328) Your Future Self, with Hal Hershfield (ep 329) Social Proof (ep 87) Other Important Links: Brainy Bites - Melina's LinkedIn Newsletter

Guest Ayelet Fishbach, a professor in behavioral science at the University of Chicago, shares insights on goal setting and motivation. Learn about overcoming obstacles, reframing goals, and staying motivated. Discover the importance of intrinsic motivation and focusing on the process. Gain strategies for planning long-term goals and approaching goal setting thoughtfully.

Brian Lowery, a professor at Stanford GSB, discusses how our behavior impacts others and vice versa. He emphasizes the flexibility of personal identity and the cyclical impact of individual behavior on communal dynamics. The episode explores the significance of empathy and perspective shift in successful communication, and delves into the effects of minor social engagements on individual attitudes and office culture. Practical advice is provided for leaders and individuals to enhance their ability to connect with others and navigate the complexities of human relationships.

In this podcast episode, Melina Palmer discusses the focusing illusion and its impact on decision-making. She explains how this cognitive bias leads us to give disproportionate weight to one aspect while neglecting others. Examples of overestimating the impact of winning the lottery and forming negative perceptions based on a single review are shared. By understanding this bias, businesses can make more informed decisions and tailor their messaging effectively. The podcast also explores the power of perspective and the importance of recognizing and questioning biases.

Hal Hershfield, expert in the concept of the future self, discusses the impact of present bias on decision-making. He emphasizes considering future outcomes and aligning present actions with future desires. Other interesting topics include establishing an emotional bond with your future self, applying mental time travel in business, and improving long-term goal prioritization.

The podcast discusses the concept of time discounting and its impact on decision-making, productivity, and goal achievement. It explores strategies to combat time discounting, such as using visual aids and cues and implementing incentives. The podcast also delves into the importance of understanding time discounting in relation to customers and employees and highlights the power of clear instructions in overcoming procrastination. Additionally, it provides insights on leveraging mirror neurons and behavioral economics nudges to influence behavior and achieve goals.

Communication expert Matt Abrahams shares strategies to overcome speaking anxiety and improve impromptu speaking. He emphasizes the importance of confidence and reframing situations. Abrahams highlights active listening, embracing uncertainty, and prioritizing listening over speaking. His book offers practical steps to enhance communication skills in various scenarios.

Learn how to use behavioral economics to successfully pitch your business by understanding brain biases, such as social proof and familiarity bias. Explore the power of availability bias in pitching and the importance of predicting trends. Discover three key points to keep in mind when pitching: keep it short, be happy with your language, and follow directions. Gain insights into stepping out of your comfort zone, leveraging frequency for perceived risk, and finding unique perspectives in personalized pitches.

In episode 325 of The Brainy Business podcast, host Melina Palmer interviews Christian Madsbjerg, author of the book Look and an expert in human observation. Madsbjerg discusses the importance of observation in understanding human behavior and helping organizations make better decisions. He emphasizes that many companies make big mistakes by not asking the right questions and relying too heavily on data abstractions and groupthink. According to Madsbjerg, companies need to constantly study the questions that are most meaningful in their industry in order to stay relevant and successful. Christian highlights the necessity of observing and describing social phenomena before forming opinions and challenges individuals and companies to question their assumptions. Madsbjerg introduces the concept of hyper-reflection, which involves analyzing how people pay attention, to gain deeper insights into human behavior. The conversation provides valuable insights into the power of observation and description in understanding the world around us and making more informed decisions. In this episode: Recognize the critical importance of keen observation in comprehending complex human behavior. Learn about the pitfalls and misleading aspects of treating the human brain like a digital interface. Delve into the influence and impact of societal constructs on human behavior. Harness the capacity of hyper-reflection to delve deeper into your own thoughts and perceptions. Appreciate the added value of integrating observational techniques into scientific enquiry. Show Notes: 00:00:00 - Introduction to Christian Madsbjerg and his Background Melina introduces Christian Madsbjerg, the author of the book Look, and discusses his background in utilizing observation techniques to help organizations better understand human behavior. 00:02:45 - The Importance of Asking the Right Questions Asking the right questions makes a huge difference for companies. They discuss the dangers of jumping into problem-solving mode without fully understanding the problem. Christian explains how companies that fail to constantly study meaningful questions often struggle to adapt and remain successful in their industries. 00:07:49 - The Class on Human Observation Christian shares his experience creating and teaching a class on human observation at the New School in Manhattan. The class focused on using observation techniques inspired by philosophy and anthropology to study social phenomena. He explains that the book is a reflection of that class, allowing more people to learn about observation. 00:11:50 - The Journey of Observation and Curiosity Christian discusses his natural inclination towards observation and curiosity. He reflects on how studying philosophy and different historical perspectives helped him develop a deeper understanding of the assumptions we make about the world. He emphasizes the importance of observing without preconceived opinions and describes observation as a technique for scrutinizing our own assumptions. 00:14:49 - Perception and Intuition Christian challenges the misconception that humans perceive the world as atomistic data. He explains that humans perceive things holistically, seeing things as part of a larger social context rather than as individual data points. He highlights the importance of understanding the relationship 00:18:17 - The Danger of Comparing Computers to Human Brains, Comparing computers to human brains can lead to a misunderstanding of what it means to be human. Humans are not just intellectual beings; much of our experience and understanding comes from our bodies and the spaces we inhabit. 00:19:55 - The Problem with Having Strong Opinions, Having strong opinions about everything can create a filter between us and the world. It prevents us from seeing things objectively and directly, as we interpret everything through a political or opinionated lens. 00:21:54 - The Importance of Describing Social Phenomena, In order to better understand the world and the work we do, we need to study and describe the social phenomena at the center of our work. By understanding the context and dynamics of a situation, we can provide better advice and make more informed decisions. 00:25:30 - Case Study: Observing Fundraising Strategies, By observing people in the streets trying to raise funds for the white rhinos, a student learned valuable lessons about effective fundraising. He discovered that gentle and subtle approaches were much more successful than aggressive or shaming tactics. 00:30:44 - The Power of Hyper Reflection, Hyper-reflection is a type of attention that allows us to observe how others pay attention. By practicing hyper-reflection, we can better understand the dynamics and behaviors of people and organizations, leading to innovation and positive change. 00:35:36 - The Importance of Observation and Description, Christian discusses the importance of observing and describing social phenomena in order to gain insight and break down biases and prejudices. He emphasizes the value of feeling connected to the world and having a direct relationship with it. 00:37:35 - Building Trust and Observing Humans, Melina mentions how this work reminds her of an Apple Fitness' "Time To Walk" episode with Jane Goodall she recently listened to. Christian draws a parallel between Jane Goodall's observations of chimpanzees and his own observations of humans. He highlights the need to build trust with people in order to accurately describe and understand group dynamics and assumptions. 00:40:11 - Different Perspectives on the Same Phenomena, Christian recognizes that he and Melina approach the same phenomena from different angles, with behavioral science and cognitive science on one side and philosophical perspectives on the other. They agree on the importance of diverse methods and techniques in gaining insight. 00:42:33 - Observation in Science, Christian and Melina discuss the role of observation in scientific breakthroughs and paradigm shifts. They agree that observation is at the heart of good science and that scientists should incorporate more observation into their work. 00:44:50 - Conclusion, Melina's top insights from the conversation. What stuck with you while listening to the episode? What are you going to try? Come share it with Melina on social media -- you'll find her as @thebrainybiz everywhere and as Melina Palmer on LinkedIn. Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation. Let's connect: Melina@TheBrainyBusiness.com The Brainy Business® on Facebook The Brainy Business on Twitter The Brainy Business on Instagram The Brainy Business on LinkedIn Melina on LinkedIn The Brainy Business on Youtube Learn and Support The Brainy Business: Check out and get your copies of Melina's Books. Get the Books Mentioned on (or related to) this Episode: Look, by Christian Madsjberg Sensemaking, by Christian Madsjberg The Moment of Clarity, by Christian Madsjberg A More Beautiful Question, by Warren Berger Both/And Thinking, by Wendy Smith and Marianne Lewis Connect with Christian: Follow Christian on LinkedIn Christian's website Top Recommended Next Episode: How Minds Change, with David McRaney (ep 210) Already Heard That One? Try These: For The Culture, with Marcus Collins (ep 305) Survivorship Bias (ep 110) What Problem Are You Solving? (ep 126) Mental Accounting (ep 282) What is Cognitive Semiotics? (ep 259) Using Semiotics in Retail, with Rachel Lawes (ep 191) Non-Obvious Thinking, with Rohit Bhargava (ep 297) Habits (ep 256) Solving Modern Problems with a Stone-Age Brain (ep 237) Confirmation Bias (ep 260) Biases Toward Others – Including Groups (ep 314) Fundamental Attribution Error (ep 268) The Overwhelmed Brain and Its Impact on Decision Making (ep 32) Functional Fixedness (ep 194) A More Beautiful Question, with Warren Berger (ep 200) Evolutionary Ideas, with Sam Tatam (ep 204) Focusing Illusion (ep 89) Anthropology, Market Research and BE, with Priscilla McKinney (ep 196) Using Ethnography in Business (ep 324) Other Important Links: Brainy Bites - Melina's LinkedIn Newsletter

Dr. Felicity Heathcote-Marcz, an ethnographer, discusses the value of ethnographic research in understanding customer behavior and organizational culture. She highlights its applications in the transport industry, uncovering future mobility trends and incident management. Challenges like time constraints and the Hawthorne Effect are addressed. Business professionals will find this episode informative and practical.