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What is behavioral economics? Why does it matter to you?

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Podcast Episodes

What is behavioral economics? Why does it matter to you?

371. Habituation and Its Antidote: A Conversation with Cass Sunstein

In the episode of The Brainy Business podcast, Cass Sunstein, a renowned legal scholar and behavioral economist, joined host Melina Palmer to discuss his new book, Look Again, and the concept of habituation and its impact on decision-making. Cass’ extensive work in government and with businesses has provided him with a deep understanding of human behavior, making his insights invaluable for business leaders and decision-makers. The conversation delved into the significance of habituation, exploring how individuals become less sensitive to stimuli over time. 

Cass highlighted the value of exploration and exploitation in learning and decision-making, emphasizing the impact of emotions on behavior and the role of diversity in decision-making processes. The episode provides valuable insights into how businesses can apply behavioral economics principles to enhance decision-making processes, ultimately shaping choices presented to individuals and influencing behavior in beneficial ways. Cass’ expertise and perspectives make this episode a must-listen for business leaders seeking to understand and leverage human behavior insights for enhanced decision-making.

In this episode:

  • Understand the psychology behind decision-making for strategic advantage.
  • Harness habituation to gain insights into customer perception and behavior.
  • Appreciate the power of dishabituation for uncovering hidden opportunities.
  • Master the balance between exploration and exploitation for effective learning.
  • Leverage nudges to influence decision-making and drive positive outcomes.
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HERE'S A 2 MINUTE TIP.

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SHOW NOTES:

00:00:00 – Introduction,
Melina introduces Cass Sunstein, his background in behavioral economics, and his newest book Look Again.

00:04:26 – The power of habituation
Cass explains the concept of habituation and its impact on how we perceive the world around us, using examples from everyday life.

00:06:15 – The importance of dishabituation
Cass discusses the importance of dishabituation in appreciating the good things in life and addressing challenges, using examples from personal experiences and historical figures.

00:13:27 – Creativity and the Fosbury Flop
Cass explores the concept of creativity and the importance of critical distance from existing practices, using the example of Olympic athlete Dick Fosbury and his innovative high jump technique.

00:15:56 – Fosbury Flop in Government
Cass shares examples of how the Fosbury Flop concept has been applied in the government to drive innovation and improve efficiency, using specific policy examples.

00:16:36 – Creativity and Disruption
Cass discusses how global entry and TSA precheck were developed by creative people, like disruptors who refuse to habituate and bring ideas from other areas.

00:17:43 – Exploration vs. Exploitation
Cass explains the difference between exploiters and explorers, where exploiters stick to what they know, while explorers seek new experiences and habituate quickly.

00:21:07 – Bill Gates vs. Warren Buffett
Cass shares how Bill Gates’ wide-ranging reading list reflects an explorer, while Warren Buffett’s focused recommendations align with an exploiter.

00:25:19 – Tips for Writing and Co-Authoring
Cass advises to follow your excitement for a project, start writing even if it’s difficult, and find co-authors who are enjoyable to work with and bring out the best in each other.

00:33:38 –  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.

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