Behavioural Economics Research
Behavioural economics is a research method often used by psychologists to study people’s decision making, and comes under the category of behavioural science
. It is performed in research studies to better understand a customer’s reasoning behind their responses by making sense of their subconscious decisions. Market researchers are using behavioural economics more and more because of its effectiveness at limiting bias and its ability to allow the researchers to greater understand the reasons behind the consumer’s decisions.
The psychologist Daniel Kahneman explains two modes describing the way humans think: system 1 (fast mode) and system 2 (slow mode). ‘Fast mode’ is used in situations such as simple Maths and is how researchers want participants to make decisions. Researchers keep participants in system 1 by applying time pressure as to ensure they do not become too logical in their thinking. System 2, however, is the more rational way of thinking and allows for the consumer to deliberate all the details to make a more informative decision.
It is thought that over 80% of decisions are made in ‘fast mode’ as it’s an unconscious, initial response to a situation – it is how a consumer first decides if they like a product or not and is the mode that branding and marketing primarily appeals to. Fast mode also explains how people are able to complete their shopping in a few minutes or hours, while being faced with thousands of different options.