Wednesday, June 24, 2009

Economics, Brands, Blink, Twitter & Facebook: Part I

Almost titled Part I: Economics, Brands, Blink by Malcolm Gladwell, and Social Networking- Twitter & Facebook.... As if that wasn't enough, did I mention Physics? I will, however, refrain from mentioning Star Trek... oops.

Some thoughts on Bob Pittman's perspective of the money making potential of the internet in this post, to give you some background:

Behavioral Economics: Isn't that an oxymoron?
Have you read Blink by Malcolm Gladwell? There is an economics' field that seems to agree with Gladwell that human beings are not all rational masters of their emotions.

Behavioral Economics around us.
Thanks to Twitter (Paula Drum RT), I came across an article talking about behavioral economics:

Most of us have helped implement a behavioral economics based solution to the pension enrollment challenge: If you want people to enroll in the pension plan, then automatically enroll them — and let them opt out if they want to.

The article also covers an example of how government intervened to incentivize teens against getting pregnant. Predictably, this will get you thinking about how this theme ties in with prevailing thoughts on financial market regulation. The article cautions that the government could itself become an "imperfect decision maker" as a market participant.

The physicists amongst us must be wondering whether economics and psychology got together to give birth to either the observer effect or the uncertainty principle.

Behavioral Economics and Game Theory.
The article got me thinking about the interplay between behavioral economics and game theory. How would an approach to less-than-fully-rational-decision-making impact game theory cases like prisoners dilemma where rational decision making leads to "seemingly sub optimal" outcomes?

I found a paper that talks about behavioral game theory:

The tweet also reminded me of another article on "Predictably Irrational" behavior:

Now, what has all of this got to do with Marketing, Tweeting and Authentic Branding?

What do you think?

Part II of this post can be found here:

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